The Invisible Tax Refunds: 10 Common Credits And Deductions You’re Probably Missing But Legally Eligible For

Every year, many taxpayers unknowingly fail to claim deductions due to ignorance of the provisions in the Income Tax Act. For example, Section 80C under the old tax regime alone covers far more than just life insurance or PPF. Repayment of your home loan principal, payment of stamp duty and registration charges, and even your children's tuition fees-all can help reduce your taxable income.

Before You Switch Tax Regimes, Don't Miss These Chapter VI-A Deductions

With the realignment of income slabs and tax rates under the simplified tax regime, the overall tax outflow for an individual taxpayer is expected to have a significant reduction. This can influence a person to switch over to this regime. However, such a decision warrants a deeper review, taking into account the deductions that would also be available to taxpayers if they continued under the old regime and are often overlooked or missed to be claimed.

As per Radhika Viswanathan, Executive Director, Deloitte India, here are some of the commonly missed yet fully legitimate deductions available under Chapter VI-A that taxpayers should be aware of:

1. Stamp duty & registration fees paid during the purchase of a residential property can be claimed under Section 80C, within the overall cap of Rs 1.5 lakh. While interest and principal repayments are typically claimed, many fail to include the above as part of the deductions.

2. Interest on housing loans for first-time homebuyers is deductible under Section 80EEA up to Rs 1.5 lakh over and above Section 24(b), subject to conditions on the loan sanction date (between April 2019 to March 2022) and property value.

3. Rent paid by individuals who do not receive house rent allowance (HRA) is deductible under Section 80GG, limited to the least of actual rent minus 10% income, 25% of income, or Rs 5,000 per month. This can be a meaningful deduction that many self-employed or those not eligible to claim HRA may miss out on claiming.

4. Self-contributions to National Pension Scheme (NPS) (or) Atal Pension Yojana (APY) qualify for deduction under Section 80CCD(1B) up to Rs 50,000, in addition to contributions through the employer.

5. Expenses incurred towards Preventive health check-ups can be claimed under Section 80D up to Rs 5,000 within the overall health insurance limits as applicable, even if paid in cash. This is often forgotten in the rush to only claim insurance premiums.

6. Medical expenditure (non-cash) in respect of Senior citizens (without an existing health insurance coverage) can be claimed as a deduction up to Rs 50,000 under Section 80D. This offers significant relief, yet could be underutilized since taxpayers may not be aware of the same.

7. Medical expenses for disabled dependents (for e.g. those with autism, cerebral palsy) qualify for deduction under Section 80DD up to Rs 75,000 or Rs 1,25,000 for severe disability. With mandatory certificate filing in Form 10-IA, it deters eligible taxpayers from claiming the deduction.

8. Treatment costs for specified diseases for self or dependents are deductible under Section 80DDB (up to Rs 40,000 or Rs 1,00,000 for senior citizens). It is important that taxpayers maintain sufficient documentation to claim this deduction. Further, taxpayers should bear in mind that this deduction will be for amounts not received from an insurance company or reimbursed by the employer.

9. Interest on education loans for higher studies (self, spouse, children) is deductible under Section 80E. While there's no upper cap on the amount, it's only available for 8 assessment years, making timing key.

10. Interest on loans for electric vehicles is deductible under Section 80EEB up to Rs 1.5 lakh, valid for loans sanctioned between April 2019 and March 2023. This is a niche but valuable benefit for eco-conscious buyers.

Section 80C to 80U: Top 10 Tax Deductions Most Taxpayers Forget to Claim

Here are 10 of the most commonly overlooked tax benefits that you might legally qualify for, as per CA Hita Shah- Associate Partner, NPV & Associates LLP.

1. Section 80GG Rent Paid Without HRA

If you are salaried or self-employed and do not receive House Rent Allowance (HRA), Section 80GG lets you claim a deduction for rent paid. This is especially useful for freelancers, consultants, or employees in non-metro areas.

Conditions:

• You must not own residential property at your place of work or residence.
• Deductions are subject to Rule 2A limits.

2. Section 80E Interest on Education Loans

Claim the entire interest paid on education loans taken for higher studies for yourself, spouse, children, or a legal ward.

Key Points:

• No upper limit on deduction.
• Available for up to 8 consecutive years from repayment start.
• Principal is not deductible.

3. Section 80D Health Insurance Premium for Parents

Deduction for paying parents' health insurance premiums:

• Rs 25,000 if parents are Rs 50,000 if > 60 years
• Rs 5,000 for preventive check-ups even without insurance

Remember to retain receipts and bills, although submission with ITR is not required.

4. Section 80DDB Treatment of Specified Diseases

Deduction is allowed for the treatment of specified diseases such as cancer, Parkinson's, chronic renal failure, AIDS, haemophilia, and thalassemia.

Key Points:

• Rs 40,000 for individuals below 60
• Rs 1,00,000 for senior (60+) and very senior (80+) citizens
• Deduction is reduced by insurance/employer reimbursements
• A prescription from a specialist at a government-recognised hospital is mandatory.

5. Section 80U Deduction for Taxpayers with Disability

If you personally suffer from a disability, Section 80U allows a flat deduction of:

• Rs.75,000 (for 40% or more disability)
• Rs.1,25,000 (for 80% or more disability)

Note: Covers conditions like blindness, hearing impairment, autism, and mental retardation.

This is distinct from Section 80DD (which applies to dependent family members with disabilities).

6. Section 80G Donations to Charitable Institutions

Contributions made to registered charitable institutions are eligible for deduction under Section 80G.

Deduction can be either 50% or 100%, with or without limits, depending on the institution.

Ensure that:

• NGO is 80G registered
• Receipt with PAN and registration.

7. Leave Travel Allowance (LTA)

LTA can be claimed by salaried employees for domestic travel only (air/train/bus fare). It can be claimed twice in a 4-year block. Keep proper documentation. But it does not cover hotel stays or meals.

8. Home Loan Benefits Sections 80C, 24(b), 80EE, 80EEA

Buying a house? Multiple tax benefits may apply:

• Section 80C: Deduction up to Rs 1.5 lakh on principal repayment
• Section 24(b): Deduction up to Rs 2 lakh on interest paid
• Section 80EE: Additional Rs 50,000 deduction for first-time homebuyers
• Section 80EEA: Additional Rs 1.5 lakh deduction (subject to loan/property value limits)

Note: 80EE and 80EEA can't be claimed together.

9. Depreciation on Business Assets

If you're self-employed or running a business, assets like cars, laptops, and office equipment used for business purposes are eligible for depreciation. This is a legitimate business expense that reduces your taxable income.

Proper asset classification and record-keeping are essential.

10. Set-Off and Carry Forward of Past Capital Losses

If you have incurred capital losses-say from the sale of shares, mutual funds, or real estate-you can carry them forward for up to 8 years to set off against future capital gains. Many taxpayers forget to report past losses in the ITR, losing the chance to offset future gains

Double-Check These Tax Sections Before You Hit 'Submit' on Your ITR

Many secret credits and deductions can drastically lower your tax payment or even boost your return, even if the majority solely concentrate on standard deductions.

"People miss is Section 80D for health insurance premiums and preventive health check-ups for the family, including dependent parents. If you're supporting a disabled dependent, Section 80DD could bring relief through deductions for medical treatment and maintenance. The cost of higher education-whether for yourself, your spouse, or your children-is another often-missed deduction under Section 80E. And let's not forget the interest portion of your home loan under Section 24(b), which offers significant tax savings. Even tax-free perquisites under Section 17(2) can quietly improve your financial picture," said O.P. Yadav, Tax Evangelist, Prosperr.io.

These 'invisible' deductions don't require you to bend the rules. Just understand the deduction applicable to the tax regime selected and use it wisely.

"Among these, the least utilised is Section 80D, which provides a deduction on the premium paid for health insurance-Rs 25,000 for individuals and Rs 50,000 for senior citizens. Similarly, for a maximum of eight years, Section 80E permits the deduction of the entire interest on student loans. If you are residing in rent-paid accommodation but don't get HRA, Section 80GG provides relief that people overlook," stated CA Manish Mishra, Founder, GenZCFO.

Contributions to registered charitable trusts under Section 80G, income tax rebates under Section 87A for incomes up to Rs 5 lakh, and the deduction of interest income under Sections 80TTA and 80TTB are also frequently overlooked.

"Homebuyers forget that home loan interest is deductible under Section 24(b). The salaried and pensioners are also eligible for a Rs 50,000 normal deduction, and payments towards the National Pension Scheme provide an additional Rs 50,000 deduction under Section 80CCD(1B)," CA Manish Mishra added.

Finally, Leave Travel Allowance (LTA) concessions are admissible every four years. Don't forget to look for any deducted credits on your Form 26AS and AIS. Keep yourself updated and get all the rupees you are due.

How to Claim 10 Invisible Tax Benefits Before You File Your ITR?

Navigating the Indian Income Tax Act, 1961, can be daunting, but it offers numerous deductions and exemptions that many taxpayers overlook. Beyond the headline deductions like Section 80C or the standard Rs 50,000 deduction for salaried employees, there lie several invisible tax breaks that many legitimately miss each year. Claiming them can turn into a neat refund or reduce your tax liability substantially. Here are ten common credits and deductions you may be overlooking, as per Rohit R Chauhan Founder Ingood.

1. Savings Account Interest Deduction (Sections 80TTA & 80TTB)

Under Section 80TTA, individuals (below 60 years) can deduct up to Rs 10,000 on interest earned from savings accounts. For senior citizens, Section 80TTB allows up to Rs 50,000 on interest from savings accounts, fixed deposits, or post office schemes. Taxpayers often miss this, especially senior citizens unaware of the higher limit under 80TTB.

Check Form 16A or bank certificates and report under "Income from other sources" to avail this.

2. Health-Insurance Premiums (Section 80D)

You can deduct up to Rs 25,000 (Rs 50,000 for senior citizens) for health insurance premiums paid for yourself, spouse, dependent children, or parents. An additional Rs 5,000 is available for preventive health check-ups. Taxpayers often forget to claim the check-up deduction or miss including premiums paid for parents.

3. Investments under Section 80C (Beyond the Usual)

While the Rs 150,000 cap under 80C is widely claimed for PF, PPF, ELSS, life-insurance, etc., many forget to include:

• Principal repayment of home loans
• Children's tuition fees (up to two children)
• National Savings Certificates
• Ensure each investment's instrument code and receipt are correctly captured in your return.

4. Additional NPS Contribution (Section 80CCD(1B))

Contributions to NPS qualify for an additional deduction of up to Rs 50,000 under Section 80CCD(1B), over and above the Rs 1.5 lakh limit of Section 80C. This is often overlooked by salaried individuals or those unaware that even self-employed persons can claim it. Track your NPS contributions to maximize savings.

5. Home-Loan Interest (Section 24(b))

Interest on loans taken for acquiring or constructing a self-occupied property is deductible up to Rs 200,000 per annum. For let-out properties, there is no upper limit (though overall losses can't exceed Rs 2 lakh). Your bank's interest certificate is key proof.

6. Education-Loan Interest (Section 80E)

Interest paid on education loans for higher studies (for yourself, spouse, or children) is fully deductible under Section 80E, with no upper limit, for up to 8 years. Many borrowers miss this, assuming it applies only to principal repayments or specific courses. Keep loan statements handy to claim this benefit.

7. Charitable Donations (Section 80G)

Donations to notified charities and relief funds fetch deductions of either 50% or 100%, with or without restriction (check the fund's category). For instance, contributions to the Prime Minister's Relief Fund are 100% deductible without limit. Always obtain stamped receipts.

8. Sections 80DD and 80U: Deductions for Disability

Under Section 80DD, if you support a dependent with a disability (spouse, children, parents, or siblings), you can claim Rs 75,000 (or Rs 1.25 lakh for severe disability) for their maintenance or medical expenses. Under Section 80U, if you yourself have a disability, you can claim Rs 75,000 (or Rs 1.25 lakh for severe disability). Many miss these deductions due to a lack of awareness or not obtaining a valid disability certificate from a recognized authority.

9. House-Rent Allowance (Section 10(13A))

If you receive HRA as part of your salary and live in a rented house, you can claim an exemption under Section 10(13A). The exempt amount is the least of: actual HRA received, 50% of salary (metro cities) or 40% (non-metro), or rent paid minus 10% of salary. Many salaried individuals miss this by not submitting rent receipts or agreements to their employer.

10. Leave-Travel Allowance (Section 10(5))

LTA covers travel expenses for you and your family (twice in a block of four years) within India. It excludes local conveyance, boarding or sightseeing. To claim, furnish actual tickets and employer declarations, and ensure your itinerary falls within the stipulated block period.

Before you e-file, cross-check your Form 16 and bank statements against this checklist. Missing out on even one can mean thousands, if not tens of thousands of rupees, left unclaimed. However, while maximising refunds is important, overstating or improperly claiming deductions can trigger scrutiny. Retain all proofs (receipts, certificates, bank statements) for at least six years, cross-verify figures against Form 16/26AS, and when in doubt, consult a chartered accountant before you file.

Common Mistakes To Avoid

• Not keeping proof of expenses-such as receipts or payment confirmations
• Assuming you're not eligible without checking eligibility conditions carefully
• Failing to update or verify data on the Income Tax Portal, leading to mismatches
• Not actively claiming the deduction while filing your ITR-these won't be applied automatically.

"Most important thing is to select the appropriate tax regime. Now, the new tax regime is the default tax regime. So there is a chance that one will go with the flow and miss out on tax savings from various deductions. Secondly, don't forget to work out how much school tuition fees are paid for your kids. This will help you reduce taxes. Thirdly, nowadays education loans for higher education are common," said Sujit Bangar, Founder Taxbuddy.com.

If your kids are availing an education loan, you can claim all interest paid on that loan as a deduction in the corresponding year. There is no upper limit for this loan. Fourthly, if you have any other income during the year, like gain on sale of property etc , do pay advance tax. This will help save interest burden.

Conclusion

Most deductions must be self-declared. Keep records, stay updated, and consult a tax advisor to ensure you're receiving every refund you're legally entitled to. Taxpayers should assess their eligibility for these deductions before moving to the new regime. A well-informed comparison-backed by actual income, expenditure, and investment data-can help reduce the tax liability.

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