How To Fill Deductions In ITR 1 Sahaj Form
Do you want to save money?
The answer to this question is an obvious YES! Who doesn’t want to?
We’ve got some good news for you. If you are filing your ITR using form ITR-1 or Sahaj Form then you can save lot of money. You must be aware that income tax return is required to be filed latest by 31st July, 2018 for the F.Y. 2017-18.
In ITR-1, there is a portion dedicated to “Deductions”. Today we’ll show, how you can save income tax using these deductions under Chapter VI-A.
Let us discuss all the ways, one-by-one.
80C: Life Insurance Premium, Deferred Annuity etc
This head basically allows you to claim deduction on various amounts deposited in specified investments, schemes etc. Some of them are enlisted as below:
- Premium amount paid on life insurance
- Investment in National Savings Certificate
- Tuition fees paid for your children’s education
- Investment in Public Provident Fund
- Principal amount repayment on housing loan, etc
Although there are many other ways through which deduction u/s 80C can be claimed but we’ve enlisted some popular ones. For in-depth analysis, refer to our Sec 80C deduction blog.
80CCC: Payment in Respect of Pension Fund
If you are making any payment today to receive pension in future, you can claim deduction of that payment u/s 80CCC. This amount needs to be invested in scheme of LIC or any scheme approved by it.
80CCD(1): Contribution to Pension Scheme of Central Government
If your employer contributes to pension scheme then you are eligible to claim this deduction. Employer can be Central Government (if joined after 1/1/04) or any other person. Maximum amount of deduction will be:
> 10% of salary of previous year, deposited by you (employee) in notified pension scheme.
> 20% of gross total income of any other assessee, if he contributes on your behalf.
It is important to note that, total amount of deduction in 80C, 80CCC & 80CCD(1) can’t exceed ₹1,50,000/-
80CCD(1B): Contribution to New Pension Scheme of Central Government
Any amount deposited by taxpayer himself in New Pension Scheme is eligible for deduction. Maximum amount of deduction will be ₹50,000/- in a financial year.
This deduction is in addition to the overall limit of Sec 80C, 80CCC, 80CCD(1).
80CCD(2): Contribution to Pension Scheme of Central Government by Employer
Any amount contributed by employer on your behalf in pension scheme is eligible for deduction. The maximum amount of deduction will be 20% salary received by you in previous year.
80CCG: Investments Made under an Equity Savings Scheme
If you have invested any money in notified equity shares/ units of equity mutual fund. Then such investment is eligible for deduction under chapter VI-A.
The maximum amount of deduction will be least of:
50% of amount invested
But this deduction is allowed only of fulfillment of certain conditions. Know more about it.
Also, this deduction will no longer be available from FY 2018-19.
80D: Health Insurance Premium
A good health is must for any individual to lead a happy life. And now you can claim deduction on medical insurance premium amount paid for health insurance. The amount of deduction has been explained further below:
Health Insurance Taken
Maximum Amount of Deduction (₹)
For yourself & family
For yourself (and you are a senior citizen) & family
For your parents
For your parents (and they are senior citizen)
For your family & parents
(25000 + 25000)
For your family & parents (parents are senior citizen)
(25000 + 30000)
For your family & parents (and both you & your parents are senior citizen)
(30000 + 30000)
*Family includes you, your wife, dependent children & person of whom you a legal guardian.
*Senior Citizen means individual of 60 years or above at any time during previous year.
From FY 2018-19 on wards, the limit for senior citizen has been increased to ₹50,000/-
To know about Sec 80D in detail, refer to our blog.
80DD: Maintenance including Medical Treatment of Dependent Person with Disability
This deduction is given when you are paying for maintenance & medical treatment of dependent relative. The amount of deduction will be (irrespective of actual expenditure incurred by you):
Dependent person with disability
Dependent person with severe disability
80DDB: Medical Treatment of Specified Disease
If you have incurred any expenditure on medical treatment for specified disease, then such amount is eligible for deduction. Maximum amount of deduction is specified as follows:
Self/ Dependent (Senior Citizen)
Self/ Dependent (Super Senior Citizen)
*Senior Citizen means individual of 60 years or above at any time during previous year.
*Super Senior Citizen is an individual of 80 years or above at anytime during previous year.
From FY 2018-19 on wards, term “super senior citizen” has been omitted. And the limit for senior citizen has been increased to ₹1,00,000/-
80E: Interest on Loan taken for Higher Education
If you have taken any loan to pursue higher education then you can claim deduction of interest on such loan. The is no limit for maximum amount of deduction. But this deduction can be taken maximum for a period of 8 years from the year you start paying interest. You can take this loan either for yourself or for your relative. Please refer to our blog for detailed discussion.
80EE: Interest on Loan taken for Residential House Property
You can claim a deduction up to ₹50,000 on interest amount of loan taken for house property. But certain conditions needs to be fulfilled:
- Loan must be taken between 1/4/16 to 31/3/17.
- Loan amount should not exceed ₹35 Lacs.
- Value of the house property should not exceed ₹50 lacs.
- You should not own any house property on date the loan is sanctioned.
Deduction u/s 80EE is in addition to interest deduction u/s 24 of House Property. It is imperative to note that, you can’t claim benefit u/s 80EE & 24 on same portion of interest.
80G: Donations to Certain Funds, Charitable Institutions etc.
The income tax department provides deduction if you have made donations to specified funds & charitable institutions. There are basically 4 category of donations:
- Donation allowed @ 100% without qualifying limit
- Donations allowed @ 50% without qualifying limit
- Donation eligible @ 100% with qualifying limit
- Donations eligible @ 50% with qualifying limit
*Qualifying limit means 10% of Adjusted Total Income.
80GG: Rent Paid
If you are living in rented accommodation then you can claim deduction u/s 80GG. But you should not be in receipt of HRA or Rent Free Accommodation.
Amount eligible for deduction is, lower of following:
> Rent Paid – 10% of Adjusted Total Income
> 25% of Adjusted Total Income
> ₹5,000 per month
80GGA: Certain Donations for Scientific or Rural Developments
If you donated any amount towards Scientific Research & Rural Development, then you are eligible for deduction.
And the good news is that, there no qualifying limit on such deduction amount. Only condition is that, your gross income should not include income from business or profession. Also, the amount of donation should not be made in cash, if it is exceeding ₹10,000.
80GGC: Donation to Political Party
This deduction is only given to indian companies. Since ITR-1 can be filed by only individual assessee, therefore it is N/A for them.
80QQB: Royalty Income of Author of Certain Books
If you have authored any book (of literary, artistic or scientific nature) & receive royalty income from it. Then you can claim deduction of such royalty income u/s 80QQB. The term “book” does not include textbooks.
The amount of deduction will be: 100% income or ₹3,00,000 whichever is less.
80RRB: Royalty on Patents
If you are a patent owner then you claim deduction on any royalty income received.
The maximum amount of deduction will be: 100% income or ₹3,00,000 whichever is less.
80TTA: Income from Interest on Savings Bank Account
We all maintain savings bank account for our secure future. So, when you earn interest income on such saving, why it should be taxed?
Sec 80TTA provides deduction in interest income up to ₹10,000 in a financial year.
80U: Person with Disability
If you have any disability & that is certified by a medical practitioner, then you can claim a standard deduction u/s 80U.
Standard Deduction means that amount shall be straight away reduced from gross income. No proof of expense is required to be submitted by you.
Amount of deduction will be:
Individual with disability
Individual with severe disability (80% or more)
These are all the deductions which you can claim while filing your ITR-1 online. Out of all the deductions only selected are available to both individual as well HUF. For you simplicity we’ve compiled a table.
80C, 80D, 80DD, 80DDB, 80G, 80GGA, 80GGC, 80TTA
Individual & HUF
80CCC, 80CCD(1), 80CCD(1B), 80CCD(2), 80CCG, 80E, 80EE, 80GG, 80QQB, 80RRB, 80U
What we Feel
With proper planning & investments in time, a lot of benefit can be availed from these deductions.
It can help you in reducing tax liability, which at the end of day is our GOAL!
We hope now you are more aware of various type of deductions available in ITR-1. Still if you need any further help, please do not hesitate to get in touch with our eCAs.
Also, now you can file your ITR online with Tax2Win for FREE! Happy Filing 🙂