Securing Hannav Ledger...
Securing Hannav Ledger...
Glossary
Tax deduction reduces taxable income by allowing certain eligible expenditures or investments to be subtracted before tax calculation.
Tax deductions lower the income on which you pay tax — like investments under 80C or health insurance under 80D.
Chapter VI-A deductions include 80C, 80D, 80E, HRA, and others in old regime. New regime offers limited deductions with lower slab rates. Deduction differs from rebate (direct tax reduction) and exemption (income excluded).
Taxable salary ₹12 lakh minus ₹1.5 lakh Section 80C and ₹25,000 Section 80D → taxable income ₹10.25 lakh, saving roughly ₹46,000 tax in 30% slab under old regime.
Exemption excludes income entirely (e.g., certain allowances). Deduction subtracts eligible amounts from gross income before tax.
Limited — standard deduction, employer NPS, etc. Most Chapter VI-A deductions like 80C require old regime election.
Employers may require declarations and proofs at year-end. ITR filing should retain receipts for scrutiny if assessed.