Income Tax Exemption Rules In India – Government approved ways to avoid Tax

Income Tax Exemption Rules In India gives options to tax payers in the form Exemptions and Investments. As a taxpayer, you have all rights to use these options to get relief if your tax amount is turning as a burden.

Exemptions:

1. House Rent Allowance – As per HRA rules
2. Conveyance Allowance – Max Rs.800 per month
3. Leave Travel Allowance – 2 times in 4 years
4. Medical Reimbursement – Max 15000/- per annum
   

Investments which can be claimed for Deduction from Income :

1. Section 80C – Max Limit Rs.1 Lakh
   

• Provident Fund (including Public PF)
• Fixed Deposits (>= 5 Yrs)
• NSC
• Insurance / Pension Plan
• Unit Linked Insurance (ULIP)
• Equity Linked Savings Scheme (ELSS)
  
• Tuition fees of children
  
• Repayment of principal on housing loan.

Additional :

2.Section u/s 80CCF- Infra structure bonds of Rs.20000 per annum

3. Medical premiums for Self – Rs. 15000 per annum

4.Medical premiums for Parents – Rs. 20000 per annum

Additional : Interest of Housing Loan –

Principal will qualify under Section 80C among other investment avenues. The interest component provides a separate deduction and has a limit of Rs. 1.5 lakh for a self-occupied property.