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Before March every year, each salaried employees should give the proof of investment to avail the income tax benefit, here is a very simple list of investments or income tax benefits you can claim as per the rules prevailing as of 2010. For understanding it more easily I had divided this in to five categories where you can avail the income tax benefits. Each has its own upper limits.
Income tax Benefit [A]

Pension Policy u/s 80CCC, Public Provident Fund (PPF) ,National Savings Certificate (NSC),Contribution to LIC,Unit Linked Insurance Plan of LIC/UTI ,Annuity Plan of LIC,Notified units of Mutual Fund or UTI,Housing Loan Principal Repayment ,Tution Fees for children.


Income tax Benefit [A] includes the above mentioned investment options , you can opt in for one or many of these listed below but the total amount of benefit you may receive will not be more than 1 lakh rupees. To explain a little bit more , consider the following example

Consider you have following investments
Pension policy                                   Rs. 25000
PPF                                                 Rs. 30000
Tution Fee for children                      Rs. 10000
Housing Loan Principle repayment     Rs. 50000

Even though you have paid 1,15,000 , you will be only eligible for income tax benefit for the amount of 1,00,000.

Income tax Benefit [B]

Mediclaim u/s 80D,,Medical treatment of dependant with disability u/s 80DD,Infrastructure Bonds u/s 80CCF,Interest on educational loan u/s 80E,Deduction for disability u/s 80U

Apart for Income tax Benefit [A], you can cliam your income tax benefit for the above list mentioned in Income tax Benefit [B] with a upper limit of Rs. 20,000

Income tax Benefit [C]

If the property is Self Occupied: (Interest repayment)

If you have a housing loan this is one of the biggest advantage you can avail.Income tax Benefit [C] have a upper limit of 1,50,000 per year. So get the statement from your banker stating the amount you have paid during the year toward the interest of your housing loan. Every banker is entitled to provide you a provisional certificate stating the separate amount which has gone in towards your principal and interest separately which can be claimed in Income tax Benefit [C] and Income tax Benefit [A] mentioned above.

Income tax Benefit [D]

Medical Bills

You need to provide the original bills expensed for you /spouse/parents. It can not be more than Rs. 15,000

Income tax Benefit [E]

LTA Travel Benefits

LTA is the another Tax benefit you can avail but during the period where you avail LTA, you should have gone on leave and travel should be inside India. You cannot have partial travel.


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