What are the exemptions and deductions while filing their Income Tax Return

What are the exemptions and deductions while filing their Income Tax Return

How to Claim Tax Exemptions while filing Income Tax Return ( ITR )?

Most of the companies require their employees to declare and submit documents related to their tax saving investments and tax exemptions for the purpose of calculating TDS. In many cases, due to work load and some other reasons employees are unable to submit required documents and company will deduct more TDS. Many employees are under the impression that they cannot avail the unclaimed exemptions once the deadline date made by company is crossed. But absolutely there is no need to worry.
One can claim the following exemptions and deductions while filing their Income Tax Return if they missed out in TDS declarations.


1. House Rent Allowance

It is paid to employee to bear rent for his residence. The calculation to quantify the amount of exemption is as follows :
Actual HRA Received.
Annual Rent paid ( - ) 10% of (Basic + DA )
40% of ( Basic + DA ) { 40% can be substituted with 50% for metro cities )
The above amount should be reduced from the figure appeared in the Form 16 with the heading “ Income chargeable under the Head Salaries ”.

2. Leave Travel Allowance ( LTA )

Many companies offer allowances to their employees to go on a vacation with their families and the amount spent can be claimed as exemption.
The above amount should be reduced from the figure appeared in the Form 16 with the heading “ Income chargeable under the Head Salaries ”.

3. Medical Allowance

If any medical allowance is received and spent the same for medical expenses you can claim it as an exemption.
The above exemptions should be reduced from the figure shown in Form 16 under “Income under the head Salaries” and should feed the remaining amount in ITR.

4. Housing Loan Related

If you have an housing loan the total amount of interest paid during the period can be claimed as deduction. From the Financial year 2017-18 onwards the amount of deduction is restricted to Rs. 2,00,000 and balance amount can be carried forward to next 8 years and can be set off in next years.
The amount of principal can be claimed as deduction U/s 80C.


1. Sec 80C Deductions

Under this section the aggregate amount of deduction is limited to Rs. 1,50,000. Following are the some of the deductions that can be claimed U/s 80C –
Life Insurance paid for self, spouse and children
Children Education Fee
5 years Tax Saving Fixed Deposits
Contribution to Provident Fund
Investments in ELSS and qualified Mutual Funds.
Housing loan Principal repayment.

2. Sec 80D ( Medical insurance )

Under this section following are allowed as deduction –
Medical Insurance for family – Maximum of Rs. 25,000
Medical Insurance for Parents – Maximum of Rs. 35,000
Preventive Health Check up – Maximum of Rs. 5,000
Many employees don’t claim the deduction for preventive health check up. This is the amount that employee spent on health check up for his family. This expense is allowed even if paid in cash.
The aggregate amount should be shown in the box shown below.

Conclusion of the Blog:
The above mentioned exemptions and deductions are common for many employees and we are also tried to emphasis on the same. It is not require to submit the original proofs of claims at the time of filling your Income tax returns but the same should be keep safe and may required to produced before assessing officer in case of scrutiny assessment if the respective officer demand.

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