10 Tax Deductions You Should Not Ignore

Bangalore: Tax season is here and people are busy filing their returns. Even though most people look for ways to lower their taxes, they often tend to overlook a few, which can help them save a lot of money. Sanjeev Sinha of Economic Times puts forth a list of 10 most over-looked tax deductions, which are as follows –

1) Deductions for Charity –

Tax deductions can be made on charitable deeds but these are operated only under certain categories. The 2 broad classifications of tax deductions for charity are – (A) and (B), both under the Section 80G of the IT Act, 1961. In category (A) – the total amount of money given in charity is deducted from the assessee's gross income. In category (B) – only half of the money donated is eligible for tax deductions. Category (A) is a better option for us to save more money. Areas under category (A) include - Prime Minister's National Relief Fund, Prime Minister's Armenia Earthquake Relief Fund, National Foundation for Communal Harmony, Maharashtra Chief Minister's Earthquake Relief Fund, National Illness Assistance Fund and others. Areas under category (B) include - Jawaharlal Nehru Memorial Fund, Prime Minister's Drought Relief Fund, Indira Gandhi Memorial Trust, Rajiv Gandhi Foundation, National Cultural Fund and others.

2) Deductions on Medical Expenses –

Tax deductions are allowed for medical expenses, again within certain limits. Medical expenses are eligible for tax deductions under Section 80D. Mediclaims for certain diseases are also covered under Section 80DDB. A few special diseases covered under this act are – neurological diseases, malignant cancers, AIDS, chronic renal failure and hematological disorders. A maximum of 40,000 is deducted for regular people and 60,000 for senior citizens. Our family members are also eligible for this deduction, only if they are completely dependent on us. However, one would require a certificate (10- I) from specialist doctors for these deductions.