How to Claim Tax Exemptions while filing ITR?

Claim Tax Exemption while filing Income Tax Return

Claim Tax Exemption while filing Income Tax Return

There are times when some salaried tax payers are not able to claim tax exemption as they were not able to submit the required documents within timelines. Generally companies start asking for the tax exemption documents like investment proof, rent receipt, Loan payment certificates etc from January onwards. But in case you were not able to submit the proof and your employer has deducted excess tax, you need not worry.

You can claim some of these exemptions while filing your income tax return (ITR).

House Rent Allowance (HRA)

You need to submit rent receipts, PAN card number of landlord (or declaration in case of no PAN card) and in some cases rent agreement to your employer to claim tax deduction against HRA.

In case you did not submit your documents before the deadline, your employer would not give tax exemption on HRA and deduct tax accordingly.

But the good news is you can claim HRA exemption even while filing your tax return.

You need to calculate the amount of HRA exemption which is minimum of

  1. Actual HRA Received or
  2. 40% (50% for metros) of (Basic + Dearness Allowance) or
  3. Rent paid (-) 10% of (Basic + Dearness Allowance)

You can use our HRA Tax exemption calculator for the same.

Also Read: 8 Questions about Tax Exemption on HRA

The next step is to subtract the above HRA exemption from the total taxable salary. This is the new “total taxable salary” to be used for filing your tax returns.

HRA exemption while filing Income Tax Return (ITR)

HRA exemption while filing Income Tax Return (ITR)

You need not submit any of the documents to the income tax department but will have to keep it safely with yourself in case your Assessing Officer asks for them.

Section 80C/80D Deductions:

In case you did not submit your investment proof for eligible instruments under section 80C like PPF, ELSS, Insurance etc you can claim these exemptions while filing your ITR. You can also claim Section 80D Deductions for Medical Insurance Premium paid for self and parents.

All you need to do is mention the investments in ITR. Again you need not send any proof to income tax department but will have to keep it safely with yourself in case your Assessing Officer asks for them.

Tax Saving Investment exemption while filing Income Tax Return (ITR)

Tax Saving Investment exemption while filing Income Tax Return (ITR)

Home Loan/ Education Loan Deductions:

Again fill the relevant details in corresponding sections to claim the deduction in ITR to claim exemption, in case you had not submitted the relevant proof to your employer.

Also read: 11 Tax Free Components You Must have in Salary

Medical Domiciliary:

Most employers offer tax free reimbursement of Rs 15,000 per year against medical bills. In case you have not submitted the relevant bills to your employer, the amount is paid after deducting tax.

Unfortunately you cannot claim exemption on Medical Allowance while filing ITR.

LTA (Leave Travel Allowance):

LTA is tax free in case you submit relevant travel bills to your employer. In case you have not done so and the employer would pay it after deducting tax.

You cannot claim tax benefit on LTA while filing ITR.

Points to Note:

  • For claiming any of the eligible tax exemption as above, you should not submit any document to Income tax Department. However keep the proofs safe with you as it may be asked by Income tax officer while scrutinizing your returns.
  • The IT Department can ask for above proofs up to six years from the year of assessment.
  • In case you were not aware of above provisions, you can file your revised return and claim tax refund. This can be done up to 2 years from the time of original filing of return. Also the original return should have been submitted before the deadline/extended deadline for that year (usually July 31).
  • Both online and offline returns can be revised. An online return can be revised only online, and an offline one can be revised offline.
  • There is no limit on number of times you can file revised returns provided it is done within the prescribed time limit.

13 thoughts on “How to Claim Tax Exemptions while filing ITR?

  1. While searching for LTA updates, i came across a post where it was mentioned that we can claim LTA but have to reduce it from Taxable income and there is no separate place to enter LTA value.

    Is this correct. I will lose out on a big amount if i am not able to enter LTA.

    • As per me You cannot claim tax benefit on LTA while filing ITR as the travel bills have to be approved by employer! You might want to take second opinion from qualified tax experts/CAs.

  2. T Jai Kumar says:

    Excellent ITR saving tips especially for Salaried individuals to ensure they do not lose out on due to higher TDS

  3. Jagat Singh Thakur says:

    i received rs. *147000/- after deduction of rs. 3000/-(TDS) from LIC money back policy and the same has been reflected in my form 26AS also( other source of income) in addition to TDS salaries. During filling the online income tax return i could not understand where the amount of Rs. *147000/- has been shown/ taken into account so that the income tax on this account can be calculated @ 2% i.e. 3000/- as deducted by LIC. please help.
    Regards: Jagat Singh

    • In case your LIC maturity amount is taxable, entire maturity amount would be taxed at your income tax slab. So in ITR it would go under income from other sources. The 2% deducted is TDS only and the actual tax liability can be more or less depending on your total income for the financial year.

  4. Kural School says:

    can a contractual employee claim HRA REBATE ,WHICH DO NOT RECEIVE HRA

  5. […] In case you do not submit the proofs, employer would not be able to give you tax benefit on your tax saving investments. This would lead to higher deduction of taxes. You can claim refund of these taxes only during filing of tax returns. […]

  6. […] 2. How to Claim Tax Exemptions while filing ITR? […]

  7. SIVAKUMARAN NAIR C says:

    Thanks for the valuable guidance

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