Hi
Pl revert that Section whether 80 E is applicable for deduction of Education loan or ineterst on Housing Loan or for both since in Ready Reckonor, it is for ineterst on Education loan while in below trailing mail ( downloaded from net ) this is ineterst for housning loan , PL suggest right answer.
Deduction
While exemptions is on income some deduction in calculation of taxable income is allowed for certain payments.
[edit] Section 80C Deductions
Section 80C of the Income Tax Act [1] allows certain investments and expenditure to be tax-exempt. The total limit under this section is Rs. 100,000 (Rupees One lac) which can be any combination of the below:
- Contribution to Provident Fund or Public Provident Fund
- Payment of life insurance premium
- Investment in pension Plans
- Investment in Equity Linked Savings schemes (ELSS) of mutual funds
- Investment in National Savings Certificates (interest of past NSCs is reinvested every year and can be added to the Section 80 limit)
- Payments towards principal repayment of housing loans.Also any registration fee or stamp duty paid.
- Payments towards tuition fees for children to any school or college or university or similar institution. (Only for 2 children)or towards coaching fee of various competitive exams.
Post office investments The investment can be from any source and not necessarily from income chargeable to tax.
From April, 1 2010, a maximum of Rs. 20,000 is deductible under section 80CCF provided that amount is invested in infrastructure bonds.
[edit] Section 80D: Medical Insurance Premiums
Health insurance, popularly known as Mediclaim Policies, provides a deduction of upto Rs. 35,000.00 (Rs. 15,000.00 for premium payments towards policies on self, spouse and children and (read as in addition to) Rs. 15,000.00 for premium payment towards non-senior citizen dependent parents or Rs. 20,000.00 for premium payment towards senior citizen dependent). This deduction is in addition to Rs. 1,00,000 savings under IT deductions clause 80C. For consideration under a senior citizen category, the incumbent's age should be 65 years during any part of the current fiscal, eg. for the fiscal year 2010-11, the incumbent should already be 65 as on March 31,2011), This deduction is also applicable to the cheques paid by proprietor firms.
[edit] Interest on Housing Loans Section 80 E
For self occupied properties, interest paid on a housing loan up to Rs 150,000 per year is exempt from tax.(Excluding Rs.1,00,000/p.a. u/s 80c Saving) However, this is only applicable for a residence constructed within three financial years after the loan is taken and also the loan if taken after April 1, 1999.
If the house is not occupied due to employment, the house will be considered self occupied.
For let out properties, the entire interest paid is deductible under section 24 of the Income Tax act. However, the rent is to be shown as income from such properties. 30% of rent received and municipal taxes paid are available for deduction of tax.
The losses from all properties shall be allowed to be adjusted against salary income at the source itself. Therefore, refund claims of T.D.S. deducted in excess, on this count, will no more be necessary.[6]
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