How to Claim Tax Exemptions while filing ITR?

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How to Claim Tax Exemption while filing Income Tax Return?

How to 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 on wards. 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.

Also Read: Best Tax Saving Investments u/s 80C

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.

Also Read: How to Pay 0 Income Tax on Rs 11 Lakh Salary?

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.

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

  1. My father is receiving pension after TDS deduction from state government. Whether we need to file ITR?
    He didn’t received Form 16. If we need to file the return, can we do reverse calculation and arrive at the Taxable Income?

  2. Dear Amit
    if i received HRA from my employer but couldn’t produce rent receipt at time and that became taxable than which ITR form is suitable to claim HRA TAX EXEMPTION i.e. ITR1 OR ITR2

  3. Dear Amit,

    Further to my previous query, our company is providing Driver Allowance, Car Washing Allowance & Car Running expenses. How I can get the tax exemption against the same.

    • For car/driver allowances you need to submit relevant bills to your company – as per their format. It would be automatically taken care in Form 16 issued by employer.

  4. My company given me a free accommodation in a single room in staff mess in a project site at Paradip and considered a part as perquisite. Whether the same can be considered as tax free under Temporary accommodation at project site. If yes, then under which section the same can consider for refund. Further company is not providing any newspaper allowance. But can I claim my news paper bill for exemption. If yes, then under which section.

    • The company is right in showing company provided accommodation as perk as per I-T laws. Also you cannot claim tax benefit on newspaper until your salary structure mentions the same.

  5. Hi amit, thanks for your information, but i have one doubt, I have a residential property in the place where I am doing the Job,that property is brought on 10/10/2016 by taking the loan from the bank. Before 10/10/2016 I used to stay in rented house . Now can I claim HRA along with the housing loan interest as deduction for the AY 2017-18 the I had paid for the rented home. – I did not submit any documents to my employer relating to this rent paid.

  6. Monika Mann says:

    Thanks Amit. It was really helpful.

  7. Hi Amit, I missed claiming LTA for the financial year 2016-2017 for the journey done on Jan 2017. Seeing this post I get that I can’t claim tax exemption on this while filing returns. Can I use this same trip for claiming exemption in the next financial year ?

  8. I have submitted wrong HRA document while initial filing and hence got rejected, can I submit the right document during ITR-V for the approval?

    • You need submit any document while filing your returns. In case you submitted wrong HRA document to your employer you can file your income tax returns with the right figures. But remember to keep the documents handy in case asked by income tax department.

  9. My father is got retire from govt job last year and getting pension, Can retired person take benefit of LTA and Medical Reimbursement?
    Where person will submit proof or support documents?

    Thanks!

  10. 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.

  11. T Jai Kumar says:

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

  12. 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.

  13. Kural School says:

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

  14. SIVAKUMARAN NAIR C says:

    Thanks for the valuable guidance

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