அளவின்கண் நின்றொழுகல் ஆற்றார் களவின்கண்

கன்றிய காத லவர். குறள் - 286

TAX AVOIDANCE

Tax avoidance is an act of using legal methods to minimize tax liability like

Investments (LIC, Tax Saving Deposits, ELSS, PF etc.,)

Donation (Registered Trust)

Tax Avoidance made possibe only when you have proper Tax Planning.

TAX EVASION

Tax Evasion is an illegal way to minimize tax liability through fraudulent techniques like

deliberate under-statement of taxable income or

inflating expenses / Deductions

Tax evasion is a crime for which the assesse could be punished under the law.

TAX AVOIDANCE (TAX PLANNING)

Investments / Payments / Incomes on which I can get tax benefit

Section 24(b) - Interest on Housing Loan Repaymnet

Section 24(b) – Deduction from Income from House Property on interest paid on housing loan & housing improvement loan. In case of self- occupied property, the upper limit for deduction of interest paid on housing loan is ₹ 2 lakh. However, this deduction is not available for person opting for New Tax Regime.

Interest on loan u/s 24(b) allowable is tabulated below

Tax deductions specified under Chapter VIA of the Income Tax Act

These Deductions will not be available to a taxpayer opting for the New Tax Regime u/s 115 BAC, except for deduction u/s 80CCD (2) which will be applicable for New Tax Regime as well

Deduction towards payments made to

Section 80C, 80CCC, 80CCD (1) [All together Maximum Rs.1,50,000.00]

Section 80C -

Life Insurance Premium

  • Provident Fund

  • Subscription to certain equity shares

  • Tuition Fees

  • National Savings Certificate,

  • Housing Loan Principal

  • Other various items

Section 80CCC - Annuity plan of LIC or other insurer towards Pension Scheme

Section 80CCD(1) - Pension Scheme of Central Government

Section 80CCD(1B) - Contribution made by an employee to Pension Scheme of Central Government [Maximum Rs.50,000.00]

Deduction towards payments made to Pension Scheme of Central Government, excluding deduction claimed under 80CCD (1)

Section 80CCD(2) - contribution made by an employer to the Pension Scheme of Central Government

If Employer is a Public Sector Undertaking , State Government or Others - Deduction limit of Maximum 10% of salary (basic pay and dearness) allowance)

If Employer is Central Government - Deduction limit Maximum of 14% of salary (basic pay and dearness)

Section 80D - Medical Insurance / Health Check up / Medical Treatment [All together Maximum ₹ 75,000 (1,00,000 Incase all are senior Citizen)]

Deduction towards payments made to Health Insurance Premium & Preventive Health check up

For Self / Spouse or Dependent Children

₹ 25,000 (₹ 50,000 if any person is a Senior Citizen)

₹ 5,000 for preventive health check up, included in above limit

For Parents

₹ 25,000 (₹50,000 if any person is a Senior Citizen)

₹ 5,000 for preventive health check up, included in above limit

Deduction towards Medical Expenditure incurred on a Senior Citizen, if no premium is paid on health insurance coverage

For Self/ Spouse or Dependent Children - Deduction Limit ₹ 50,000

For Parents - Deduction limit of ₹ 50,000

Section 80DD - Maintenance or Medical treatment of a Disabled Dependent

Deduction towards payments made towards Maintenance or Medical treatment of a Disabled Dependent or Paid / Deposited any amount under relevant approved scheme

Flat deduction of ₹ 75,000 available for a person with Disability, irrespective of expense incurred

The deduction is ₹ 1,25,000 if the person has Severe Disability (80% or more)

Section 80DDB - Medical treatment of Self or Dependant for specified diseases

Deduction towards payments made towards Medical treatment of Self or Dependant for specified diseases

Deduction limit of ₹ 40,000 (₹ 1,00,000 if Senior Citizen)

Section 80E - Loan for higher education of Self or relative

Deduction towards interest payments made on loan for higher education of Self or relative


  • Total amount paid towards interest on loan taken

Loan taken for acquisition of residential house property

Section 80EE - Where the loan is sanctioned between 1st April 2016 to 31st March 2017

Deduction towards interest payments made on loan taken for acquisition of residential house property

Deduction limit of ₹ 50,000 on the interest paid on loan taken

Section 80EEA - Loan is sanctioned between 1st April 2019 to 31st March 2022 & deduction should not have been claimed u/s 80EE

Deduction available only to individuals towards interest payments made on loan taken for acquisition of residential house property for the first time.

Section 80EEB - Interest payments made on loan for purchase of Electric Vehicle

Deduction towards interest payments made on loan for purchase of Electric Vehicle where the loan is sanctioned between 1st April 2019 to 31st March 2023

Deduction limit of ₹ 1,50,000 on the interest paid on loan taken

Section 80G - Donations made to prescribed Funds, Charitable Institutions etc.


Donation are eligible for deduction under the below categories


Without any limit

  • 100% deduction

  • 50% deduction

(Note: No deduction shall be allowed under this section in respect of donation made in cash exceeding ₹ 2000/-)


Subject to qualifying limit

  • 100% deduction

  • 50% deduction

Section 80GG - Rent paid for house & applicable to only those who are self-employed or for whom HRA is not part of Salary

Least of the following shall be allowed as deduction

  • Rent paid reduced by 10% of Total Income before this deduction

  • ₹ 5,000 per month

  • 25% of Total Income (excluding long term capital gains, short term capital gains under section 111A or income under section 115A or 115D)

Note: Form 10BA to be filled for claiming this deduction.

Section 80TTA - Interest received on saving bank accounts

Non-Senior Citizens (Individuals) and HUF - Deduction limit of ₹ 10,000/-

Saving Account Held in

  • Bank

  • Co-operative Bank

  • Post office

Section 80TTB - Interest Received on Deposits (Including Savings Account & Time Deposits)

Resident Senior Citizens - Deduction limit of ₹ 50,000/-

Deposit Includes

  • Bank deposits

  • Co-operative Society engaged in banking business

  • Co-operative Land Mortgage Bank (or) Co-operative Land Development Bank

  • Post Office Deposits

Section 80U - Resident individual taxpayer with Disability

Deductions for a resident individual taxpayer with Disability

Flat ₹ 75,000 deduction for a person with Disability, irrespective of expense incurred

Flat ₹ 1,25,000 deduction for a person with Severe Disability (80% or more), irrespective of expense incurred