ITR Rebates

ITR Rebates : New Tax Regime

In the new tax regime introduced under the Finance Act, 2020, many exemptions and deductions available under the old tax regime were eliminated. However, certain exemptions remain available for taxpayers. Here's a comprehensive list of exemptions that are available in the new tax regime:

Exemptions Available in the New Tax Regime

1. Section 10(10D):

   • Life Insurance Policy: The maturity proceeds of life insurance policies are exempt from tax under Section 10(10D) provided the premium does not exceed 10% of the sum assured.

2. Section 10(14):

   • Certain Allowances: While most allowances are taxable, specific allowances like:

     • Compensatory Allowance (for meeting the cost of living).

     • Children's Education Allowance (up to ₹100 per month per child for a maximum of 2 children).

     • Hostel Expenditure Allowance (up to ₹300 per month per child for a maximum of 2 children) may be exempt.

3. Section 10(15):

   • Certain Interest Income:

     • Interest income from specified bonds and securities (like NRE deposits) is exempt under certain conditions.

4. Section 10(11):

   • Pension Plans: Commuted value of pension received from certain approved superannuation funds is exempt.

5. Section 10(12):

   • Recognized Provident Fund: The amount received from a recognized provident fund is exempt if certain conditions are met.

6. Section 10(16):

   • Scholarships: Scholarships received to meet the cost of education are fully exempt from tax.

7. Section 10(33):

   • Income from Equity Mutual Funds: Long-term capital gains (LTCG) on equity shares or equity-oriented mutual funds are exempt up to ₹1 lakh in a financial year. Gains above this limit are taxable at 10%.

8. Section 10(38):

   • Short-Term Capital Gains on Listed Shares: Short-term capital gains on the sale of listed shares are taxed at 15%.

Points to Note

• Taxpayers opting for the new tax regime should be aware that many popular exemptions and deductions available in the old regime, such as those under Section 80C, 80D, and standard deduction, are not available.

• It is essential to evaluate both tax regimes to determine which is more beneficial based on individual circumstances, income levels, and the availability of exemptions.

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ITR Rebates : Old Tax Regime


Here’s a comprehensive list of the various rebates and deductions available for Income Tax Returns (ITR) in India as of the latest tax provisions: (Old Tax Regime)

1. Rebate under Section 87A

• Eligibility: Available to individuals with a total taxable income up to ₹5,00,000.

• Rebate Amount: Maximum rebate of ₹2,500.

• Note: This rebate effectively allows individuals in this income bracket to pay no tax.

2. Section 80C Deductions

• Investment Limit: Up to ₹1,50,000 in specified instruments.

• Eligible Investments:

  • Public Provident Fund (PPF)

  • National Savings Certificates (NSC)

  • Employee Provident Fund (EPF)

  • Equity Linked Savings Scheme (ELSS)

  • Life Insurance Premiums

  • Sukanya Samriddhi Yojana

3. Section 80CCC

• Contribution to Pension Funds: Deductions for contributions to certain pension funds, up to ₹1,50,000.

4. Section 80D

• Health Insurance Premiums:

  • Deduction for premiums paid for self, spouse, children, and parents.

  • Maximum deduction: ₹25,000 for individuals below 60 years and ₹50,000 for senior citizens (above 60 years).

5. Section 80E

• Interest on Education Loans: Deduction on interest paid on loans taken for higher education, with no upper limit.

6. Section 80G

• Donations: Deductions for donations made to charitable institutions, with varying percentage limits based on the organization.

7. Section 80TTA

• Savings Bank Interest: Deduction of up to ₹10,000 on interest earned from savings bank accounts.

8. Section 80TTB

• Interest for Senior Citizens: A deduction of up to ₹50,000 on interest income from savings accounts, fixed deposits, and recurring deposits.

9. Section 80U

• Disability Deduction: Individuals with disabilities can claim a deduction of ₹75,000 or ₹1,25,000 based on the severity of the disability.

10. Section 24(b)

• Home Loan Interest: Deduction on the interest paid on home loans up to ₹2,00,000 for a self-occupied property.

11. Section 10(14)

• Special Allowances: Tax exemption on special allowances granted to employees, such as travel allowances, uniforms, etc., subject to certain conditions.

12. Section 10(16)

• Scholarships: Tax exemption on scholarships received for educational purposes.

13. Section 10(15)

• Interest on Certain Securities: Exemption on interest earned on specific government securities and bonds.

14. Section 80DDB

• Medical Expenses: Deductions for expenses incurred on treatment of specified diseases for self or dependents, with a maximum deduction of ₹40,000 (or ₹1,00,000 for senior citizens).

15. Standard Deduction

• Amount: A standard deduction of ₹50,000 is available for salaried individuals and pensioners.

16. Section 80GGC

• Contributions to Political Parties: Deductions for contributions made to political parties.

17. Section 80C (2)(xii)

• Investments in notified bonds: Certain notified bonds for infrastructure development.

18. Section 80P

• Income of Cooperatives: Deductions for income earned by cooperative societies.

Conclusion

These rebates and deductions are designed to provide tax relief to individuals and encourage savings, investments, and charitable donations. Taxpayers should carefully assess their eligibility for these deductions while filing their ITR to minimize tax liabilities effectively.

If you have specific questions regarding any of these provisions or need further details, feel free to mail me.