Want to lower your tax payment without violating any laws? After that, you must comprehend non-taxable deductions. These are the legal methods to reduce your taxable income by applying the Income Tax Act’s offered benefits. These deductions will save a lot regardless of your position—salaried, business owner, or investor.
Let’s examine the most prevalent non-taxable deductions in India.
What are deductions from non-taxable sources?
Amounts you could deduct from your overall income before computing your tax are non-taxable deductions. The government provides these totally legal incentives to support savings, investments, health care, and education.
Most Often Used Non-Taxable Deductions Available in India
- Section 80C – Investments and Expenses (Up to ₹1.5 Lakh)
- Life insurance premiums
- Worker Provident Fund (EPF)
- PPF, or public provident fund
- ELSS reciprocal funds
- Children’s tuition
- Home loan principal returns
- Life insurance premiums
- Section 80D: Health Insurance Premiums
- Up to ₹25,000 for children, spouse, and self
- Extra ₹25,000 for parents; ₹50,000 if they are senior citizens
- Up to ₹25,000 for children, spouse, and self
- Standard Deduction
- Salaried and pensioners’ ₹50,000
- Not necessary any evidence
- Automatically approved should you be paid a salary or pension
- Salaried and pensioners’ ₹50,000
- HRA, or House Rent Allowance
- If you rent a house and get HRA from your company
- Deduct claims depending on salary, rent paid, city of residence
- If you rent a house and get HRA from your company
- Section 80E: Interest on a Loan for Education
- There is no limit on deduction
- Available for loans taken for self, spouse, or children in higher education
- There is no limit on deduction
- Section 24(b)—Interest on a Home Loan
- Claim up to ₹2 lakh deduction on home loan interest paid
- For a house occupied by oneself
- Claim up to ₹2 lakh deduction on home loan interest paid
- Section 80G: Contributions to Non-Governmental Organizations
- Relief money and donations to authorized non-governmental organizations
- The deduction depends on the company: 50% or 100%
- Relief money and donations to authorized non-governmental organizations
- Section 80CCD(1B), NPS Deduction
- Extra ₹50,000 for National Pension System Contributions
- Over and beyond the 80C ₹1.5 lakh cap
- Extra ₹50,000 for National Pension System Contributions
Other Non-Taxable Dues
Check your pay slip if you work for salaried pay. These non-taxable elements could also be yours:
- Leave Travel Allowance (LTA) for internal Indian travel
- Food coupons valued up to ₹50 per meal
- Mobile/Online refund
- Professional or uniform allowance, relevant to your employment
Advice to Maximise Non-Taxable Deductions
- Sort your investments at the start of the year
- Store all receipts and proof securely
- Check your pay plan with your HR for tax-friendly choices
- Make all investments, not waiting until March
Conclusion
A wise and legal way to lower your tax burden is by taking non-taxable deductions. Understanding what deductions apply to you and making sensible plans will help you to save thousands of rupees annually. You have rights as a taxpayer, thus you should not miss these advantages!