Sole proprietor business means a business entity which is run by one individual and for which there is absolutely no difference between the owner and business. A sole proprietor is also known as a self-employed person or an individual. IT work offers various taxes deductions for a only personal or proprietor used person.
If you are a self-employed person or only proprietor then you can take benefit of all these tax deductions to pay less tax. These taxes deductions are allowed after deriving your gross total income. Below is a summary of tax deductions open to single personal or proprietor-employed person in India. From the list of deductions below listed, 80C is a famous section. Section 80C has a summary of expenses and investments which can be claimed as an income tax deduction up to a maximum limit of 150000 rupees.
You can avail deductions for investing in LIC, PPF, mutual fund, 5 yrs fixed deposit or even for paying tuition fee for your children. This section is introduced to claim tax deductions for investing into a pension fund. Section 80CCC is for payment of high quality amount towards an annuity plan of the LIC or any other insurance company for getting a pension from the finance. From AY 2012-2013 onwards, the total deduction under section 80C, 80CCompact disc, and 80CCC cannot exceed the maximum limit of 150000 rupees. So whatever amount you have invested will be added and then based on this restriction tax deduction should be claimed.
Medical insurance premium covered you, your spouse or children will be eligible for tax deduction under section 80D. The utmost limit of tax deduction is 15000 rupees. Additional deduction of Rs. 15000 for payment of high quality towards medical care insurance for parents and 5000 for having insurance superior for senior is allowed. Additional deduction means in addition to the standard deduction of 15000 rupees, you can claim it extra. You can get detail provision of section 80D here. Finance Budget 2015 has enhanced the tax deduction limit of Section 80D. Read our article on section 80D to learn the Detail Provision for taxes deductions for medical high quality.
Medical expense for treatment of handicapped dependent can be stated as a tax deduction under section 80DD from it act. You can also claim a tax deduction for the amount paid to LIC or other insurance company for the benefit of handicapped dependent. Fixed taxes deduction of 50000 rupees can be claimed under this section and can further be prolonged to 100000 rupees if the handicapped dependent’s disability is 80% or more than that. Expenses for medical treatment of specific diseases can be claimed as a tax deduction under section 80DDB of IT act.
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To claim a tax deduction, the condition must be specified under rule 11DD of IT rules. If it is a specific disease and you have incurred medical expenses for it then you are eligible for tax deduction up to a maximum amount of 40000 rupees. Tax deduction can rise to 60000 rupees if the assessee for whom medical expenditures are incurred is a senior citizen. Section 80E enable you to claim a tax deduction for education loan extracted from any bank or investment company or financial institution for higher studies.
Tax deduction under section 80E can be claimed for the loan taken for higher studies of your or spouse or any of the children for whom you will be the legal guardian. The entire interest amount paid for the education loan will be allowed as taxes deduction. Year 2013-2014 onwards From financial, you can claim a tax deduction of 100000 rupees if the housing loan is 2500000 rupees and the worthiness for which the housing loan has been taken is 4000000 rupees.