10 Tax Deductions Salaried Employees Forget Every Year

Most salaried employees know about Section 80C (₹1.5L limit), HRA, and standard deduction. But the Income Tax Act has dozens of other deductions that go unclaimed year after year — simply because people don't know they exist. Here are 10 deductions worth knowing.

1. Section 80D — Health Insurance Premium

Up to ₹25,000/year for health insurance for self, spouse, and children. Additional ₹25,000 for parents (₹50,000 if parents are senior citizens). Maximum deduction: ₹1,00,000 for a family with senior citizen parents. Most employees claim this for their personal policy but forget to include parents' premiums.

2. Section 24(b) — Home Loan Interest

Up to ₹2,00,000/year on interest paid on a home loan for a self-occupied property. If you have a let-out property, there's no upper limit on interest deduction (though set-off against other income has a ₹2L cap). Many employees are unaware the deduction continues for the full loan tenure.

3. Section 80E — Education Loan Interest

The entire interest paid on an education loan (for higher education) is deductible — there's no upper limit. The deduction is available for up to 8 consecutive years. Many young professionals paying back education loans miss this deduction entirely.

4. Section 80TTA / 80TTB — Savings Account Interest

Section 80TTA: Deduction of up to ₹10,000 on savings account interest (for non-senior-citizens). Section 80TTB: Senior citizens get ₹50,000 deduction on all interest income including FD and RD.

5. Section 80GG — HRA for Those Not Receiving HRA

If your salary doesn't include HRA (common in small companies), you can still claim a deduction on rent paid under Section 80GG — subject to conditions. Maximum deduction: ₹5,000/month (₹60,000/year).

6. Section 80G — Donations to Recognised Charities

Donations to PM Relief Fund, National Defence Fund, and many registered NGOs qualify for 50–100% deduction. Keep donation receipts with the organisation's 80G certificate. Many employees donate to charity but never claim the deduction.

7. Section 10(14) — Special Allowances

Your salary may include allowances that are partially or fully exempt — but only if you actually incur the expense and document it. Commonly missed allowances: Uniform allowance, Children's education allowance (₹100/month per child), Hostel allowance (₹300/month per child), Conveyance allowance.

8. Section 80CCD(1B) — Additional NPS Contribution

Beyond the ₹1.5L 80C limit, you can contribute an additional ₹50,000 to NPS under Section 80CCD(1B). This is a bonus deduction on top of 80C — giving total deductions up to ₹2L just from these two sections combined. Heavily underutilised by employees.

9. Section 80CCD(2) — Employer's NPS Contribution

If your employer contributes to your NPS account (up to 10% of basic salary), this amount is deductible over and above the ₹1.5L + ₹50,000 limit. This deduction has no upper cap and is not subject to any income limit. Ask HR if your employer offers NPS as part of the flexible benefits package.

10. Section 89(1) — Arrear Salary Relief

If you received salary arrears this year for previous years, you'll pay higher tax due to the clubbing effect. Section 89(1) allows you to calculate tax as if the arrears were received in the original year, potentially giving significant relief. File Form 10E on the IT portal before filing your ITR to claim this.