Tax Deductions
A deduction is an item that allows you to take a tax benefit up to the entire amount of the deduction. The good news is that this reduces your taxable income by the amount of the deduction, i.e., by using the deduction you end up paying a lesser amount in taxes. Just as an illustration, lets take the following simple mathematical example.
Amit’s income is Rs.100
Amit’s eligible deduction is Rs.20
Therefore, Amit’s taxable income is Rs.80
If Amit did not have a deduction, then his taxable income would have been Rs.100
By using the deduction Amit has saved taxes on up to Rs.20
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Comments
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sourav dubey said : 05/02/2010 |
THE INFORMATION IS REALLY VERY HELPFUL IN CALCULATING THE INCOME TAX |
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RATAN said : 07/01/2010 |
Thanks alot for providing Incometax information in such a manner that even illitrate can also understand easily. Keep it up and request you to please give more and more info on such things which help public. Thanks Again |
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Maheshwar rai said : 08/09/2009 |
i am from salaried class income between 3-4 LAKHS PPFis Rs-177000/annually i am getting deduction of 1 lakh only May i get some more deduction by purchasing MF/LIC policy please guide thanks |
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shradha said : 21/03/2009 |
really nice |