Filing Income Tax Return is an important process and the last date to file Income Tax Return is 31st July 2018. Before you start filing your ITR you must know that there are certain Tax Breaks or break-ups that you should keep in mind before filing ITR.
Interest Income from Savings Account.
The balance in your Savings Bank Account earns you some interest and this interest income is considered as a part of your total income. Moreover, under section 80TTA, Income Tax Department allows an exemption of up to Rs.10,000 on this interest income. Any interest income from Post Office Savings will also receive similar kind of benefit.
Exemption on Rent without House Rent Allowance (HRA).
There are many taxpayers who pay rent but they cannot claim HRA or House Rent Allowance exemption, as this component is missing from their salary. Well, fret not. If you are staying in a rented accommodation, then, in that case, you can claim deduction under section 80GG of the Income Tax Act. You will not be able to avail this deduction if you, your spouse or our child owns the house in which you live in. The exemption is limited to the least of: rent paid less 10% of total income; or Rs 5,000 a month; or 25% of total income.
Benefits that you can claim for making donations.
Generally, deductions under Section 80G can be claimed for the donations that the taxpayer has made for a relevant Financial Year, but this deduction does not reflect in Form 16. So, the taxpayer can claim this exemption while filing Income Tax returns. Depending on where you have contributed, you can claim a deduction of 50-100% for the donation that you have made. However, it cannot exceed 10% of your total income.
Well, these are some of the major tax breaks that you must remember while filing ITR.