4. Disabilities Also Eligible for Deduction

If you are paying medical fees for your or a dependant's disabilities, you can claim up to 1,00,000 for deduction. Section 80DD provides for deductions relating to the expenses incurred for medical treatment, training and rehabilitation of handicapped dependants or for the assessee’s themselves.

It is interesting to note that regardless of the actual expenditure, you can still claim deductions up to the slabs ranging from 50,000 to 1,00,000. One needs a Disability Certificate (Form 10-IA) from a recognized Medical Authority. You can claim up to 50,000 for simple disability, 75,000 for Severe Disability and 100,000 for disability of 80 percent or above. The disabled person should be completely or entirely dependent on the taxpayer.

5. Donations to Charities and Political Parties

There are two types of lists that Section 80G classifies for tax deductions. One list offers complete deduction from the assessee's gross income. The other only gives deductions up to 50 percent of the donated amount from total income.

There are riders even within these groups. The limit is set at 10 percent of gross total income for certain causes. Make sure donations are in cash and not kind like medicines or cots.

Also make sure the registration number of the trust, as issued by the income tax department under section 80G is on the receipt. Since 2009, a 100% deduction on companies and individuals is applicable for donations to electoral trusts which in turn routes money to political parties. Previously, private companies were allowed a maximum limit up to 5% of their profits.