Income Tax Deductions for AY 2019-20: Little-known surprising benefits explained; check IT calculator
Income Tax Deductions for AY 2019-20: It is not possible for everyone to undergo all provisions of the Income Tax Act of India.
Income Tax Deductions for AY 2019-20: It is not possible for everyone to undergo all provisions of the Income Tax Act of India. Even some of the most talented law students will find the task daunting. This challenge leaves people unaware of the many little known provisions that a taxpayer can take advantage of. While we all are aware of some common tax deductions like medical benefits, HRA, home loan EMIs, following are some little known deductions that can help you save a lot of money:
Capital losses can cause tax gain!
Under the Income Tax Act, any profit or gain arising from transfer of a capital asset during the year is charged to tax under the head “Capital Gains”.
We all are aware that tax needs to be paid on any short term or long term capital gains. But very few know that capital losses can be balanced off against gains. Fo example: If you make a a long-term capital gain of Rs 30 lakh by selling property and long-term capital loss of 10 lakh by selling stocks, then the total taxable amount for you would be Rs 12 lakh.
Short term losses can be balanced off against both short term as well as long term capital gains. This is not the case with long term capital losses as they can only be balanced off against long term capital gains.
Pay low tax for having an ill dependant
If you have a dependent suffering from chronic illness, the income tax department will allows a deduction of Rs 40,000 (Rs 60,000 if the dependant is a senior citizen) per year, under Section 80DDB. These dependants could be siblings, children, parents and spouses.
Specific diseases for which this deduction is applicable include many neurological diseases like dystonia musculorum deformans, aphasia and Parkinson’s disease, hemiballismus, ataxia, motor neuron disease, chorea, haematological disorders, chronic kidney failure, and a few more.
To claim this deduction, the patient should be dependant on the taxpayer. He/she should not have filed for such a deduction separately.
You can claim a tax deduction of 50 per cent to 100 per cent on the amount contributed to a political party. This is governed under Section 80GGC for individuals and Section GGB for corporate organisations. You can contribute up to 10 per cent of your total income to a political party.