What are the different types of allowances and perks under income tax?

Section

Nature of Payment

Supporting Documents to be submitted

Tax Benefit

House Rent Allowance (HRA)

House Rent

• Original Rent Receipt – required for the entire financial year from April 2021 to the date of proof submission (receipts can be based on monthly/ Quarterly payment) and uploaded on the ESS portal.
• Employees, who joined between the financial years i.e., after 1st April 2021, should submit the rent receipt only for the period with Remote.
• Rent Receipt should contain Rent Paid, Name, Signature, and Address of Landlord.
• In case of rent paid through bank transfer, a statement of account should be enclosed highlighting the payment portion along with the rental agreement.
• In case of rent paid by cheque, details of cheque number, date, and bank name need to be mentioned in the receipt.
• PAN Number of Landlord is mandatory if per month rent amount is more than Rs.8333/- P.M

• Actual HRA Received
• Rent paid minus 10% of Basic.
• 50% of Basic (Metro Cities) or 40% of basic for the rest of the cities.
• Whichever is less will be considered for exemption for above 3 points.

Chapter VIA Deduction other than Sec. 80C deduction

Medical Insurance Premium (U/S 80D)

• Copy of premium paid receipt

Rs. 50,000/- if employee / spouse are senior. citizen or else Rs 25000/- for non-senior citizen

Medical Insurance Premium (U/S 80D) For Senior Citizen

Rs. 50,000/- if parents are senior citizens or else Rs 25000/- for non-senior citizen

Preventive Health Check-up (U/S 80D)

• Photocopy of original receipt
• This is part of Sec 80D and the maximum limit U/S 80D
• Mode of cash or cheque payment

Rs. 5,000/-

Maintenance / Medical Treatment of Handicapped Dependent - 80DD

• A copy of the certificate issued by the competent medical authority in a Government Hospital / Private hospital specifying the % of disability

Rs. 75,000/- if disability is >40% and < 80% and Rs. 1,25,000/- if disability is >80%

Interest on Education Loan - 80E

• An education loan taken for the purpose of pursuing higher education for Self / Spouse / Children of the employe.
• Total interest paid during the FY 2021-22 will be allowed as a deduction.
• Copy of the certificate issued by the Bank/ Financial Institution showing the interest and principal portion, separately.
• The certificate should specify that it is an education loan.

Certificate / Letter issued by Financial institution

Rajiv Gandhi Equity Saving Scheme - 80 CCG

• Photocopy of Receipt of Investment proof
• Investment should prior to 2017-18

Rs 25,000/-

Permanent Physical Disability - 80U

• Copy of certificate issued by a competent medical authority in a Government approved hospital / private hospital specifying the % of disability

Rs. 75,000/- if disability is >40% and < 80% and Rs. 1,25,000/- if disability is >80%

Deductions with respect to interest paid on the first house - 80EE

• First-time home buyer in FY 2021-22 i.e. assessee doesn’t own any house property on the loan sanction date.
• Loan to be sanctioned between April 2016 to March 2017
• Loan sanctioned amount doesn’t exceed Rs 3500000
• Value of property doesn’t exceed Rs 5000000
• The loan sanction date should be mentioned in the bank provisional certificate
• Property registered document should be submitted
• Completion certificate of the House Property.

Rs 50,000/-

NPS - 80CCD (1B)

• An additional tax exemption of Rs. 50,000 will be provided for the amount invested in National Pension Scheme. The amount of exemption is over and above the limit.
• Photocopy of the receipt to be enclosed.

Rs 50,000/-

Chapter VIA Deduction under Sec. 80C

Life Insurance Premium

• Photocopy of the receipt issued by any insurance company approved by IRDA.
• The policy can be in the name of the employee, spouse, or children.
• It should specify that premium is eligible for deduction u/s 80C.
• Photocopy of previous year's receipt to be uploaded in the portal if payment is due after the cut-off date.
• Late fee charges will be excluded from the exemption.

Rs. 1,50,000/-

Public Provident Fund – PPF

• Photocopy of stamped challan along with pass book.
• PPF account statement should be in the name of Employee / Spouse / Children

National Savings Certificates - NSC

• Copy of the Certificates purchased during the 2021-2022
• Investment in the name of Employee only

Equity Linked Savings Scheme – ELSS / Mutual Fund

• Copy of the receipt of the subscription. 
• A confirmation from the bank/institution that the investment qualifies under section 80C.
• Investment in the name of Employee only.
• Photocopy of previous year's receipt to be uploaded in the portal if payment is due after the cut-off date.

Unit Linked Insurance Premium - ULIP

• Copy of the receipt of the subscription.  A confirmation from the bank/ institution that the investment qualifies under section 80C
• Investment in the name of Employee only
• Photocopy of previous years receipt to be uploaded in the portal if payment is due after the cut off date 

Children Education Fees (Tuition Fees)

• Photocopy of receipts of the school/college,  showing the name of the child.
• Only the tuition fee/term fee/exam fee will be considered for income tax benefit only for 2 children.
• Photocopy of previous year's receipt to be uploaded in the portal if payment is due after the cut off date

Contribution to Pension Fund

• Photocopy of receipt issued by IRDA-approved insurance company.
• The policy can be in the name of employee/spouse/children.
• Photocopy of previous year's receipt to be uploaded in the portal if payment is due after the cut-off date.

Home Loan Principal

• Provisional certificate pertaining to the current financial year.
• In the case of Joint Property, the declaration which specifies the % of tax benefit claim by an employee. If not mentioned 50% of the benefit will be applied as an exemption. 
• Photocopy of sale deed and stamp duty paid receipt if it is paid in the current financial year to claim the benefit of Stamp Duty

5 Years Fixed Deposit in Scheduled Bank

• Photocopy of bond issued by the scheduled bank for the current financial year.
• Investment in the name of the employee only.
• Deposit for minimum 5 years term.

5 Years Post Office Time Deposit

• Photocopy of the receipt/statement issued by the post office for the deposit during the current financial year.
• Investment in the name of the employee only.
• Time deposit for a minimum of 5 years is allowed.

Sukanya Samriddhi Yojana

• The scheme applies to investment in the girl child who is 10 years.
• Eligibility applies for 2 girls only.
• Bank/post office deposit challan along with passbook front page to be enclosed

Under Sec. 24 Loss from House Property

Self Occupied Property

• Latest provisional certificate issued by Financial Institution/Bank for the current financial year (stating interest paid till date and balance payable till March 2022). No provisional certificate issued in the month of April 2021 is accepted.
• In the case of Joint Property, declaration specifying % of benefit claimed by the employee, if not mentioned 50% of the benefit will be applied as an exemption.
• Possession certificate from builder/completion certificate if the property is handed over in the current financial year. If there is no possession letter, the employee needs to fill and submit the attached declaration in the portal.
• If hand over is after the cut-off date, a letter from the builder confirming the date of hand over of the property.
• Pre EMI interest is deductible in 5 equal installments starting from the year when the construction is completed or property is occupied.
• Interest benefit cannot be availed if the house is not completed or in possession on or before 31st March 2022.
• Bank / Lenders PAN to be submitted

Rs. 30,000/- if Loan is taken before 01.04.1999 and Rs, 2,00,000/- if Loan is taken after 01.04.1999

If Joint Property, the amount allowed will be either Rs. 30,000/- or Rs. 2,00,000/- per property

Let-out Property

• Latest provisional certificate issued by Financial Institution / Bank for the current financial year. (stating interest paid till date and balance payable till March 2022). No provisional certificate issued in the month of April 2021 is accepted.
• Rental agreement as support of rent received.
• Photocopy of municipal tax paid.
• In the case of Joint Property, a declaration specifying % of benefit claimed by the employee, if not mentioned 50% of the benefit will be applied as an exemption.
• Possession certificate from builder/completion certificate if the property is handed over in the current financial year.
• Pre EMI interest is deductible in 5 equal installments starting from the year when the construction is completed or property is occupied.
• Loss from Housing Property calculation as per the attached format to be submitted.
• Bank / Lenders PAN to be submitted.

(Irrespective of let out or self-occupied or any number of house  properties) would be restricted to Rs.2 lac alone. No amount exceeding Rs.2 Lac would be eligible for the claim

Previous Employment Income

Salary income after Section 10 exemption

• Photocopy of Form 16 / Certified Ta Computation issued by the previous employer.
• Applicable only if the employee joined after 1st April 2021

Professional tax deducted

Provident Fund / Voluntary Provident Fund Deducted

Income Tax Deducted