Income Tax Deduction Chart

Income Tax Deduction allows individuals to legally reduce their taxable income by using specific exemptions, investments, and expenses under the Income Tax Act, 1961. By planning wisely and claiming eligible deductions, taxpayers can lower their tax liability and boost savings. From insurance premiums to home loan interest and retirement schemes, there are several ways to benefit. This blog will provide you with detailed information on the income tax deduction chart.

What is an Income Tax Deduction?

An Income Tax Deduction is an amount that reduces your total taxable income, helping you legally save on taxes under the Income Tax Act 1961. By claiming eligible deductions on expenses like life insurance premiums, home loan interest, medical bills, education loans, or investments under Section 80C, you can lower the portion of your income that is taxed. This helps you in reducing your tax burden and increase your savings. Common deductions include Section 80C (PPF, LIC, ELSS), 80D (health insurance), and 24(b) (home loan interest). Careful tax planning using these provisions ensures maximum savings and compliance with government rules.

Income Tax Deduction Chart

The Income Tax Deduction Chart for FY-2025-26 is given below:

Section 80C of the Income Tax Act

Section 80C of the Income Tax Act, 1961, is one of the most popular and widely used provisions for tax saving in India. It allows individual taxpayers and Hindu Undivided Families (HUFs) to reduce their taxable income by investing in or spending on specified financial instruments. You can claim a deduction of up to Rs 1,50,000 every financial year under this section, helping you save a significant amount on your income tax.

However, it’s important to note that these benefits are available only under the Old Tax Regime. If you choose the New Tax Regime, most of these deductions are not applicable.

Common Expenses & Investments Eligible under Section 80C:

• Life Insurance Premiums: Premiums paid for life insurance policies for self, spouse, or children are eligible for deductions. Policies from LIC or private insurers are covered.
• Employee Provident Fund (EPF) Contributions: For salaried employees, the contribution towards EPF qualifies for tax deduction.
• Public Provident Fund (PPF): Investments in PPF accounts not only save tax but also offer safe and tax-free returns.
• National Savings Certificate (NSC): NSC is a government-backed savings option with fixed returns and tax benefits.
• Equity-Linked Savings Scheme (ELSS): ELSS mutual funds offer potentially high returns with the shortest lock-in period of 3 years among 80C options.
• Sukanya Samriddhi Yojana (SSY): Investments in SSY accounts for the welfare of a girl child enjoy attractive interest rates and tax savings.
• 5-Year Fixed Deposits: Tax-saving fixed deposits with banks (with a 5-year lock-in) are also eligible.
• Senior Citizens Savings Scheme (SCSS): Senior citizens can invest in SCSS and claim tax benefits while earning assured returns.
• Children’s Tuition Fees: Taxpayers can claim deductions for tuition fees paid for up to two children studying in India.
• Home Loan Principal Repayment: The principal portion of home loan repayments qualifies for tax deduction.
• Stamp Duty & Registration Charges: Expenses towards stamp duty and registration for purchasing a new residential house are also deductible.

Smart tax planning doesn’t just help you save money, it also encourages you to invest in your future, your family’s security, and your well-being. By understanding and using the various deductions under the Income Tax Act, you can lower your tax burden while building financial stability. Stay informed, plan wisely, and make the most of these government-backed benefits. This article provided you with detailed information on the income tax deduction chart. Contact Online Legal India to get assistance and support in filing an income tax return from professional experts.