10 Deductions You Can Claim on Your Income Tax

Most Indian taxpayers miss at least three of the deductions they qualify for, leaving 15,000 to 50,000 rupees on the table every single year. Income Tax India rules give you more than 30 ways to legally reduce taxable income, but only 10 carry the weight for ordinary salaried filers. Here is the practical short list, ranked by impact for the average household.

These deductions apply to the old tax regime. The new regime swaps most deductions for slightly lower slab rates. Run both calculations every year — in many cases, the old regime still wins for households with home loans and large insurance premiums.

Why this checklist matters

Tax filing is not the place to discover what you could have claimed. Most legitimate deductions need proof — receipts, certificates, or paid premiums — collected during the year. A monthly check stops the year-end scramble and the silent loss of refundable amounts that should have been yours.

1. Section 80C — the headline 1.5 lakh

The biggest single deduction. EPF, PPF, ELSS mutual funds, life insurance premiums, principal home loan repayment, NSC, tax-saving FDs, and tuition fees for children all stack into this one bucket. Cap is 1.5 lakh rupees per year. Most salaried filers hit the cap with EPF and home loan principal alone.

2. Section 80D — health insurance premium

Up to 25,000 rupees for self, spouse, and children. Add another 25,000 for parents under 60, or 50,000 for parents above 60. Preventive health checkup expenses up to 5,000 rupees count too. Pay by cheque or digital — cash payments are not deductible under any circumstances.

3. Section 24(b) — home loan interest

Up to 2 lakh rupees on interest paid for a self-occupied house. For let-out properties, the full interest paid is deductible against rental income. Combined with section 80C principal, a home loan delivers the largest tax benefit any salaried filer is likely to access in their working life.

4. NPS — Section 80CCD(1B)

An additional 50,000 rupees over and above the 1.5 lakh limit of 80C. Specifically for NPS Tier 1 contributions. One of the only deductions that genuinely adds new tax savings rather than reshuffling existing ones. Skip it only if you cannot lock money until retirement.

5. Section 80E — education loan interest

Full interest paid on an education loan is deductible with no upper cap. Available for 8 years from the start of repayment, for self, spouse, or children. Often missed by parents who took the loan in their own name and never claimed.

6. Section 80G — donations to registered charities

50 percent or 100 percent of donation amount, depending on the charity category. Keep the stamped receipt with the 80G registration number. Donations to PM CARES, CM Relief Funds, and several listed charities qualify for 100 percent deduction without any upper cap.

7. HRA exemption — Section 10(13A)

Not technically a deduction, but a salary exemption. The least of three values: actual HRA received, 50 percent of basic for metro residents (40 percent non-metro), or rent paid minus 10 percent of basic. Demand rent receipts and the landlord's PAN if rent exceeds 1 lakh rupees per year.

8. LTA — leave travel allowance

Domestic travel cost for self and family, twice in a four-year block. Only travel fares qualify, not stay or food. Often unclaimed because employees forget to submit boarding passes within the deadline. Track the block period carefully — losing the slot means losing the tax-free amount.

9. Section 80TTA / 80TTB — savings interest

10,000 rupees of savings account interest deductible for under-60 filers. Senior citizens get 50,000 across savings AND fixed deposit interest under 80TTB. Frequently missed because TDS on small interest amounts looks tiny — but the 50,000 unlocked at the senior citizen tier is a clean win every year.

10. Section 80DDB — specified medical treatments

Up to 40,000 rupees for treatment of specified illnesses such as cancer, chronic kidney conditions, neurological disorders, AIDS, and others, for self or dependents. 1 lakh for senior citizens. Requires a certificate from a specialist doctor. Underclaimed because few filers even know it exists.

Commonly missed items beyond the top 10

• Tax-saving FD interest — the principal qualifies for 80C, but the interest itself is fully taxable each year.
• Home loan processing fees — partly deductible as part of interest under section 24.
• Disability deduction — section 80U for the taxpayer or 80DD for a dependent, up to 1.25 lakh.
• Section 80EEA — extra 1.5 lakh on home loan interest for first-time affordable home buyers.
• Standard deduction — flat 50,000 (75,000 in some years) automatically applied for salaried filers.

You can verify all sections, sub-clauses, and current monetary limits on the official portal at incometax.gov.in before filing your return each year.

Wrap-up

Run through this checklist every quarter, not in March. Most deductions need supporting documents — premium receipts, donation certificates, rent agreements, medical bills. Collect them as the year unfolds, not in a panic the week before deadline. The 30 minutes it takes each quarter is the highest hourly tax-savings rate you will ever earn as a salaried Indian.

One last warning: never claim a deduction without the underlying proof. Tax notices for mismatched 80C and 80D claims have risen sharply in recent years as the income tax department cross-checks digital records. The deduction is not yours just because you spent the money — it is yours when you can produce the receipt on demand.