Income Tax Benefit on Life, Health Insurance and Others
Whether you are salaried individual or a businessman, when it comes to personal tax everyone gets confused. Personal taxation is such a thing whose knowledge is very difficult to understand fully. In this article I am sharing a small personal taxation guide for beginners which will help in understanding small things in very basic language. So let us discuss personal taxation step by step.
Income Tax Benefit on Life Insurance Premiums
We will start with life insurance premiums. Do you know that you, even if you are paying premiums for financially dependent parents, you cannot claim for tax deduction according to the income tax section 80 C. However, if you are paying life insurance premiums for your children, then you can take advantage of tax rebate on the premiums paid whether or not they are financially dependent on you. You can get income tax benefit for the life insurance premiums paid for married son or daughter.
Tax Benefit on Health Insurance Premiums
Under the section 80 D of the Income Tax Act, you get income tax benefit on the health insurance premiums paid for your family and parents. One interesting thing is that even though your parents are not financially dependent on you but you still claim for the benefit. Apart from these you can claim benefit for the premiums paid for financially independent husband or wife. But for claiming the benefit for your child it is required that they are financially dependent on you.
Advantages of Home Loan Deductions:
Let us discuss section 24 B which states that you can benefit from deductions on the interest paid on the home loan. And you can claim the benefit for residential or commercial property. However you should be aware of home loan rejection reasons
On the interest paid for the residential property where you are residing, you can get benefit of upto INR 1,50,000 on the home loan interest. But if you have rented that property then you can claim benefit for the amount you pay as a interest. Under the section 80 C of income tax act, you can claim the benefit only when the loan is taken from financial institutions such as banks, housing finance companies, and others.
Interest on Tuition Fees and Educational Loan:
Under the section 80C of the income tax act, you can claim benefit on the deductions done for the tuition fees of two child. But according to the section 80E, you can claim benefit on the interest paid on the educational loan taken for higher education abroad. But you can get this benefit only if the interest is paid during that particular year. Read more on planning money for abroad studies
Tax Benefits on LTA:
You can claim LTA benefits for yourself, husband, wife, parents and brother or sister. In case of husband or wife and child, benefits can be claimed only when they are not financially dependent on you whereas for claiming the benefits on parents and brother or sister they should be financially dependent on you.