The deadline to file your income tax return (ITR) for FY 2023-24 (AY 2024-25) is July 31, 2024. With less than a month left, it’s crucial to ensure your ITR is processed accurately and on time. Whether you choose the old or new tax regime, understanding the deductions available can significantly reduce your tax outgo. This guide will help you navigate the various deductions under both regimes to optimize your tax savings.
Filing ITR Online
Taxpayers can file their ITR online through the Income Tax e-Filing Portal. For salaried individuals, Form 16 is a key document to keep handy during the filing process.
Also Read: ITR Filing Latest Update: Step-By-Step Guide On How To Download Form 16
Key Deductions Under the Old Tax Regime
Standard Deduction
- Eligibility: Salaried individuals
- Amount: ₹50,000
Section 80C, 80CCC, and 80CCD(1)
- Eligibility: Investments in specified instruments (e.g., tax-saving FDs, ELSS mutual funds, life insurance)
- Amount: Up to ₹1.5 lakh (combined limit)
- Additional Deduction: ₹50,000 under Section 80CCD(1B) for contributions to NPS
Section 80D
- Eligibility: Premiums paid on health insurance
- Amount: Up to ₹25,000 (self, spouse, children); ₹50,000 (senior citizens)
Sections 80DD and 80DDB
- Eligibility: Expenses for disabled dependents and specified diseases.
- Amount: ₹75,000 (80DD); ₹40,000 (80DDB), ₹1 lakh for senior citizens.
Section 80E
- Eligibility: Interest on education loans.
- Amount: No upper limit, available for up to 8 years.
Section 80G
- Eligibility: Donations to specified funds.
- Amount: Varies, maximum ₹2,000 in cash.
Section 80GG
- Eligibility: Rent paid without HRA
- Amount: Lower of ₹5,000 per month, 25% of total income, or rent paid minus 10% of total income
Section 80TTA and 80TTB
- Eligibility: Interest income from savings accounts (80TTA) and fixed deposits (80TTB)
- Amount: ₹10,000 (80TTA); ₹50,000 for senior citizens (80TTB)
Also Read: What Is ITR 2: Know How To File ITR-2 Online For FY 2023-24
Key Deductions Under the New Tax Regime
Starting FY 2023-24, the new tax regime is the default. It offers a simplified structure with fewer deductions:
- Standard Deduction: ₹50,000 for salaried individuals
- Family Pension: ₹15,000 or 1/3rd of pension, whichever is lower
- Employer’s Contribution to NPS (Section 80CCD(2)): Up to 10% of salary
| Deductions available under Old Regime Vs. New Regime | ||
| Available Exemptions/Deductions | New tax regime | Old tax regime |
| Standard Deduction from Salary of Rs. 50,000 | Yes | Yes |
| Leave Travel Allowance (LTA) | No | Yes |
| Section 80TTA/ Section 80TTB Deduction | No | Yes |
| House Rent Allowance (HRA) u/s 10(13A) | No | Yes |
| Section 80C, 80CCC, 80CCD(1), 80D, etc. | No | Yes |
| Deductions u/s 80CCD(2) for Employer’s Contribution to Employee NPS Accounts | Yes | Yes |
| Section 80CCD(1B) (Additional NPS Contribution) | No | Yes |
Employees with Rs 15 lakh salary should opt for which tax regime?
The tax regime you opt for you will depend on the number of tax-saving investments you have made:
For a ₹15 Lakh Salary
- Old Regime: Opt if tax-saving investments exceed ₹3,75,000
- New Regime: Opt if tax-saving investments are below ₹3,75,000
Which tax regime should you choose for Rs 10 lakh salary?
- Old Regime: Opt if tax-saving investments exceed ₹2,62,500
- New Regime: Opt if tax-saving investments are below ₹2,62,500
Check the due date of TDS Return for FY 2024-2025
Steps to File ITR Online
- Visit e-Filing Portal: Log in with your PAN/Aadhaar and password.
- File Income Tax Return: Navigate to E-File > Income Tax Returns > File Income Tax Return.
- Select Assessment Year: Choose AY 2024-25 and the mode of filing as ‘online’.
- Proceed: Click ‘Continue’.
- Select Your Status: Choose ‘Individual’ and click ‘Continue’.
- Choose ITR Form: Select ‘ITR-2’ if applicable.
- Reason for Filing: Select the reason and click ‘Continue’.
- Fill Schedules: Enter details for applicable schedules.
- Verify and Submit: Review and submit the ITR, ensuring e-verification within 30 days.
Additional Tips
- Download Form 26AS: Verify TDS details.
- Ensure Accuracy: Cross-check pre-filled information.
- Maintain Records: Keep all relevant documents, such as salary slips and investment proofs.
By strategically utilizing the available deductions, you can significantly reduce your tax liability. Whether you opt for the old or new tax regime, understanding these deductions will help you make informed decisions and optimize your tax savings.
