Tax Deductions & Exemptions India (FY 2024-25 & FY 2025-26): Reliefs for Individuals & Businesses

A Tax deductions are reductions in your taxable income. They lower the amount of income on which you calculate your tax. Think of it as reducing the size of the pie before you slice it.

A Tax exemptions are specific types of income that are not included in your total income for tax calculation. They are completely excluded from taxation. Think of it as a portion of the pie that is completely removed before you slice it.

A Tax reliefs are broader provisions that reduce your overall tax burden. This can include deductions, exemptions, rebates, or other measures that lower the final tax payable. It is a more general term.

A • Deduction: Reduces your taxable income. You still report the income, but a portion is subtracted.
• Exemption: The income is not included in your total income at all.

A Tax relief is a broader term encompassing various ways to reduce your tax burden. Deductions and exemptions are specific types of tax relief. A tax rebate is another form of tax relief.

A Common deductions under the Income Tax Act include:
• Section 80C: Investments in PPF, EPF, life insurance premiums, ELSS, etc.
• Section 80D: Medical insurance premiums.
• Section 80E: Interest on education loan.
• Section 80EE/80EEA: Interest on home loan (subject to conditions).
• Section 80TTA/80TTB: Interest on savings account (subject to conditions).
(Note: This is not an exhaustive list.)

A You claim deductions by reporting them in your income tax return (ITR) and providing supporting documents.

A Common exemptions include:
• Agricultural income (under certain conditions).
• Certain allowances received by government employees.
• Interest income from certain bonds.
• Gifts received under specific circumstances.
(Note: This is not an exhaustive list.)

A You claim exemptions by not including the exempt income in your total income reported in your ITR.

A A tax rebate is a direct reduction in the tax payable. It is subtracted from the calculated tax after deductions and exemptions have been applied. It is different from a deduction, which reduces taxable income.

A Section 87A provides a tax rebate to resident individuals whose net taxable income does not exceed a certain limit. This rebate effectively reduces their tax liability, sometimes to zero. (Check the current income tax rules for the exact rebate amount and income limit, as these can change.)

A The eligible tax rebate is automatically applied when you file your ITR.

A The most reliable source is the Income Tax Department's official website. You can also refer to the annual Finance Act and related notifications. OR reach out to us on email: info@returnfilings.com or on whatsapp: https://wa.me/919910123091.

A Tax laws are subject to amendments and updates, usually annually during the budget. It's crucial to stay informed about the latest changes.

A A tax advisor can help you understand the complex tax laws, identify all eligible deductions, exemptions, and reliefs, and optimize your tax liability.

A By utilizing available deductions, exemptions, and reliefs.

A Senior citizens have specific tax benefits, including higher basic exemption limits and deductions for medical expenses.

A Some specific deductions are available for women.

A Invest in eligible tax-saving instruments under Section 80C and other applicable sections.

A Certain investments in mutual funds are eligible for tax deductions under Section 80C.

A Donations to approved charities are eligible for deductions under Section 80G.

A Interest paid on home loans is eligible for deductions under Section 80EE/80EEA.

A Medical insurance premiums are eligible for deductions under Section 80D.

A Specific deductions are available under Section 80U.

A The Income Tax Department's website is the official source for rules and regulations.