5. Deduction of allowances

There are multiple allowances that income tax Act has specified, which the company or the employer will deduct from your income.

Firstly, 300 per month per child is allowed, which will go up to a maximum of 2 children.

Second is the education allowance, which is 100 per month per child up to a maximum of two children is exempted from income.

These above allowances are still not applicable in India, but the income tax department has plans of bringing this into action at the earliest.

Even when it comes to medical expenditure which is incurred for dependent children are allowed with the deduction limit of 15, 000 per year on furnishing of medical bills.

In today’s date where there is inflation, the amount of deduction that are applied is an insignificant amount today, since the deduction limits were made several years ago.

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