Filing ITR 1, ITR 2? Don't miss these 5 tax breaks

The last date of filing income tax return (ITR) for FY2023-24 is July 31, 2024. Whether you are filing ITR 1 or ITR 2, you are allowed to claim certain tax deductions and exemptions which will help to reduce your tax outgo. Don't forget to claim these tax breaks while filing ITR for AY2024-25.

The balance in your savings account earns interest every quarter, which is considered part of your total income. However, Section 80TTA of the Income-tax Act 1961, allows you a tax exemption of up to Rs 10,000 on this interest. Interest earned on a post-office savings account will also fetch a similar benefit.

Do you pay rent but can't claim a deduction for that amount due to the absence of the house rent allowance (HRA) component in your salary? Under Section 80GG, you can avail of the benefit for the rent even if your salary package does not include HRA, provided you are not eligible for any housing benefit. You will not qualify for this break if you, your spouse, or your child own the house you live in. The exemption is limited to the least of: rent paid less than 10% of total income; or Rs 5,000 a month; or 25% of total income.

Section 80D allows tax deductions of up to Rs 25,000 every financial year on health insurance premiums. You can claim deductions for a policy bought for yourself, your spouse, and your dependent children.

With Section 80D you can also avail of an additional deduction of Rs 5,000 on any expenses incurred for preventative health check-ups.

If your parents are below the age of 60, you can claim an additional deduction of up to Rs 25,000 for paying their health insurance premium. If one or both of your parents are senior citizens i.e. age of above 60 years, then you can claim a deduction of up to Rs 50,000 under Section 80D.

If you lost money in investments during the previous financial year, you can adjust some losses against capital gains from the sale of stocks, property, gold or debt funds. Short-term capital losses can be set off against both short-term capital gains as well as taxable long-term capital gains. Long-term capital losses can only be set off against taxable long-term capital gains.

Typically, deductions under Section 80G on donations made do not reflect in Form 16. So, this exemption can be claimed while filing returns. Depending on where you have contributed, you can claim a deduction of 50-100% of the donation made. However, it cannot exceed 10% of your total income. “If the donation was made in cash, no deduction is allowable if the amount exceeds Rs 2,000,” says Suresh Surana, a tax expert.