In view of the circumstances related to coronavirus and lockdown, the central government has extended the investment deadline till July 31, 2020 to get income tax exemption for the financial year 2019-20. This means that you can get the benefit of tax deduction on investments made till 31 July 2020. It is important that in which item you can get the benefit of tax deduction on investment or expenditure. Almost all taxpayers are aware that under Section 80 (C) of the Income Tax Act, investment of up to one and a half lakh rupees is available under the old tax system. You will be aware of tax saving schemes like PPF and ELSS but do you know that you can get the benefit of tax rebate on the expenses incurred on stamp duty.
Tax and investment expert Balwant Jain said that under Section 80CCD (1B) of the Income Tax Act, 1961, you get an additional tax deduction of Rs 50,000 by investing in the National Pension System (NPS). He told that this is in addition to the rebate of 1.5 lakh rupees available under 80 (C). NPS was started by the government in 2004. NPS is a voluntary retirement scheme. After investing in this scheme you get a lump sum and monthly pension after retirement.
With the goal of providing houses to all, the government is giving an additional deduction of one and a half lakh rupees to the purchaser of houses worth Rs 45 lakh between April 1, 2019 to March 31, 2021. For this, Section 80EEA has been included in the Income Tax Act. However, the benefit of tax deduction on payment of interest will only be available to the first home buyers. Jain said that under this section even before the possession of the house, there is a benefit of tax exemption.