Frequently asked questions on tax saving

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Why do I need to provide my landlord’s PAN number to my employer to avail deduction of House Rent Allowance (HRA) from gross total income?

There is no need to provide your landlord’s PAN number to your employer if you are paying rent less than Rs. 1 Lakh per year. However, it is mandatory to provide the PAN number of your landlord to your employer if the yearly rental is more than or equal to Rs. 1 lakh to avail the HRA exemption benefit.

Can self-employed individuals claim the HRA benefit?
No, self-employed individuals cannot avail the HRA benefit but they can save tax on rent paid under section 80GG if they meet the eligibility conditions.

How can I save tax on the rent paid if I don’t receive House Rent Allowance as part of my salary / am self- employed ?
One can avail the tax benefit on the rent paid under section 80GG. Even Self-employed individuals can claim deduction under this section. However, one must fulfil certain conditions before claiming deduction under this section.

Is the interest received on the tax saving FD taxable?
Yes, the interest received on a tax saving FD is taxable.

How can I save tax on an education loan?
Section 80E of the I-T Act allows an individual to claim the entire interest paid on an education loan as a deduction from gross total income before calculation of taxable income. The education loan can be taken for an education of the individual himself/herself or spouse or his/her children.

What is the maximum limit for availing deduction of interest paid on Home Loan?
Section 24 allows an individual to claim the deduction of the interest paid on the home loan taken up to a maximum of Rs. 2 lakh in case of the self occupied properties for the current financial year 2016-17. In the case of rented properties, the interest paid deduction has no limit. However, Budget 2017 has proposed the interest deduction limit for the rented properties of Rs. 2 Lakh.

Can one get any tax benefit on the principal repaid on a home loan?
Yes, you can claim deduction of the principal repayment from gross total income under the overall limit of the section 80C. The overall limit under Section 80C is at Rs. 1.5 lakh for FY2016-17 and proposed to be kept the same for FY2017-18.

Can I claim the deduction on the health insurance premium paid for my parents?
Yes, you can claim the health insurance premium paid for your parents as a deduction from your gross total income. If your parents are aged below 60 years then a maximum of Rs. 25,000 and for age above 60 years maximum of Rs. 30,000 can be claimed as deduction.