How to claim multiple tax deductions in a single ITR
- Asharam Swain
- Apr 29
- 10 min read
When filing your Income Tax Return (ITR), claiming multiple deductions is an effective way to reduce your taxable income, thereby lowering your tax liability. The Income Tax Act, 1961, offers various sections under which taxpayers can claim deductions for expenses and investments made during the financial year. These deductions can be from areas like insurance premiums, contributions to retirement funds, medical expenses, education loans, and donations to charity.
However, for individuals who have income from multiple sources or have changed jobs during the year, the process of consolidating and filing these deductions can seem complex. Understanding how to claim multiple deductions in a single ITR, along with ensuring that all your income details are properly consolidated, is crucial for maximizing tax savings and ensuring compliance with the tax laws.
Table of Contents
How to Claim Multiple Tax Deductions in a Single ITR
To claim multiple tax deductions in a single Income Tax Return (ITR), you need to collect all relevant documents like Form 16s from different employers, investment proofs, insurance premium receipts, and loan certificates. After consolidating the income details from all Form 16s, you can claim deductions under various sections such as 80C, 80D, and 80E, based on your eligible expenses and investments. Ensure that you choose the appropriate tax regime (old or new) as it determines the deductions available to you. Make sure to enter all details accurately while filing your ITR through online platforms and verify your income and deductions with Form 26AS to avoid discrepancies. Additionally, pre-validate your bank account to receive timely tax refunds.
Collect and Consolidate All Income and Deduction Details
Handling Multiple Form 16s and Verifying TDS
If you have changed jobs during the financial year, you may receive more than one Form 16—one from each employer. Each Form 16 includes details such as TDS deducted, income earned, and deductions claimed by the employer. To ensure your ITR reflects the total income and TDS correctly, you need to consolidate the information from all Form 16s.
Tip: Double-check that the TDS shown in your Form 16 matches the information in your Form 26AS (a statement available on the Income Tax portal that shows the tax credited against your PAN). Any discrepancies could result in a mismatch that could affect your tax refund or liability.
How to Add Up Income and Deductions Across Various Form 16s
Once you have all your Form 16s, the next step is to add up your total income and deductions.
Salary: Combine the salary figures from all Form 16s, particularly the details in Part B, which include the salary breakdown and deductions claimed by the employer.
Other Deductions: Ensure you include all deductions mentioned across the forms. Employers typically claim deductions under sections like 80C (e.g., PPF, ELSS, life insurance) and 80D (health insurance), so verify that these are accounted for.
Choose the Appropriate Tax Regime
Is the Old Tax Regime Better for Multiple Deductions?
The old tax regime allows taxpayers to claim various deductions and exemptions, making it more beneficial for individuals who have significant deductible expenses. Deductions under sections like 80C (investments), 80D (health insurance), and 80E (education loan interest) can substantially reduce your taxable income.
Key Advantage: If you are someone who invests regularly in tax-saving instruments or spends on eligible expenses (e.g., health insurance premiums), the old tax regime can provide greater tax relief.
How the New Tax Regime Limits Deductions
The new tax regime offers lower tax rates but limits the ability to claim deductions and exemptions. In this regime, most deductions are not available, including the popular ones under sections 80C, 80D, and 80E.
Key Limitation: While the new tax regime offers reduced tax rates, the trade-off is the loss of various deductions that could significantly lower your tax liability under the old regime. If your deductions exceed the difference in tax rates between the two regimes, the old tax regime might be more beneficial.
Claiming Multiple Deductions Under Various Sections
Section 80C: Investment Deductions
Section 80C offers a deduction of up to ₹1.5 lakh for investments made in eligible instruments. These can include contributions to the Public Provident Fund (PPF), Employee Provident Fund (EPF), National Savings Certificates (NSC), tax-saving Fixed Deposits (FDs), and life insurance premiums.
Tip: If you have invested in multiple eligible instruments, ensure that the total deduction under this section does not exceed ₹1.5 lakh.
Section 80D: Health Insurance Deductions
Section 80D provides a deduction for premiums paid on health insurance policies for yourself, your spouse, children, and parents. The maximum deduction available is ₹25,000 for individuals and their families, and ₹50,000 for senior citizens.
Tip: If you are paying premiums for senior citizens, you can claim a higher deduction under this section.
Section 80E: Education Loan Interest Deductions
Section 80E allows deductions for interest paid on loans taken for higher education. There is no upper limit for the amount of interest you can claim, and the deduction can be claimed for up to eight years or until the interest is paid, whichever is earlier.
Tip: Make sure to keep track of the interest paid and ensure that the loan qualifies under this section.
Section 80G: Donations to Charity
Section 80G offers deductions for donations made to approved charitable institutions. The amount deductible depends on the nature of the donation and the organization receiving it. Some donations qualify for a 100% deduction, while others qualify for 50%.
Tip: Be sure to check the eligibility of the institution and retain receipts for all donations made.
Other Deductions (80CCD, 80TTA, etc.)
Other sections like 80CCD allow deductions for contributions to the National Pension Scheme (NPS), and Section 80TTA provides deductions on interest earned from savings accounts. Section 80GGA covers donations made to scientific research and rural development.
Tip: Review all available sections to ensure you claim all eligible deductions and stay within the statutory limits.
Filing ITR with Multiple Deductions and Income Sources
How to enter multiple Form 16s and deductions in ITR
When filing an ITR with multiple Form 16s, ensure you consolidate the income and TDS details from each Form 16. Use the ITR filing platform to input the total income from all employers, along with the deductions claimed by each employer. For other deductions (like those under Section 80C, 80D, etc.), enter them separately as per the documentation you have, such as receipts for insurance premiums or proof of investments. It’s important to verify that all deductions do not exceed their respective limits before submitting.
Using online platforms for simplified filing
Platforms like ClearTax, TaxBuddy, and the Income Tax Department's e-filing portal offer simplified ITR filing experiences. These platforms allow you to upload all necessary documents, including multiple Form 16s, and guide you through the deduction claim process. The platforms automatically calculate tax liability after considering deductions and ensure you don’t miss any critical step in the filing process.
Pre-Validate Bank Account for Income Tax Refunds
Linking bank accounts for direct refunds
To receive your tax refund directly into your account, ensure that your bank account is linked to your PAN. This can be done through the Income Tax Department's e-filing portal. Once your account is linked, your refund will be processed and credited directly into the validated bank account. Make sure the account details entered in the portal match your bank's information to avoid any delays.
How to pre-validate multiple bank accounts for refunds
The Income Tax Department allows you to pre-validate multiple bank accounts for refunds, but only one account can be designated as the primary account for receiving the refund. You can add and verify several bank accounts under your PAN, but when filing your ITR, you must select one as the primary account for the refund. This process ensures smooth processing of refunds, especially if you have multiple accounts.
Common Mistakes to Avoid When Claiming Multiple Deductions
Misreporting income or deductions
One common mistake when filing ITR with multiple Form 16s is misreporting income or deductions. Ensure that all income from various employers is properly added, and deductions from each Form 16 are entered accurately. Missing or incorrect details can lead to discrepancies in tax calculations and delay your refund.
Not verifying Form 26AS for accuracy
Form 26AS reflects the TDS deducted by your employer and is a crucial document to cross-check with your Form 16s. Failing to verify the details in Form 26AS can lead to mismatches, resulting in the denial of tax credit. Always download Form 26AS from the Income Tax portal and ensure that the TDS figures match your Form 16 before submitting your ITR.
Conclusion
Claiming multiple deductions in a single ITR is straightforward when you follow the correct process. Ensure you collect all necessary documents, such as multiple Form 16s and investment proofs, and choose the right tax regime. By accurately entering income details and deductions, verifying Form 26AS, and linking your bank account for direct refunds, you can file your return smoothly and avoid common mistakes. The use of online platforms can make the process even easier, helping you maximize your tax savings while ensuring compliance with the law.
FAQs
Q1. Can I claim deductions under both Section 80C and 80D?
Yes, you can claim deductions under both Section 80C and Section 80D in a single ITR. Section 80C allows deductions up to ₹1.5 lakh for investments like PPF, ELSS, and life insurance premiums. Section 80D allows you to claim up to ₹1 lakh for premiums paid for health insurance for yourself, your family, and your parents. These deductions are independent of each other and do not overlap.
Q2. How to handle deductions if I have multiple Form 16s?
If you have multiple Form 16s due to switching jobs during the financial year, it’s important to consolidate the income and TDS details from all Form 16s. Sum up the salary, TDS deductions, and deductions under Section 80C or 80D mentioned in Part B of each Form 16. You must also cross-check these with Form 26AS to ensure accuracy. When filing your ITR, input the total income and deductions to avoid discrepancies.
Q3. Can I switch tax regimes while filing ITR if I initially chose differently?
Yes, you can switch between the old and new tax regimes at the time of filing your ITR. If you initially opted for one regime with your employer, you can override that choice when filing your return. However, switching between regimes may impact the deductions available to you. The old regime allows multiple deductions (e.g., under Section 80C, 80D), while the new regime offers lower tax rates but restricts most deductions.
Q4. How to avoid TDS on interest income if my total income is below taxable limit?
If your total income is below the taxable limit, you can prevent TDS from being deducted on interest income by submitting Form 15G (for non-senior citizens) or Form 15H (for senior citizens) to your bank before the start of the financial year. These forms declare that your total income is below the taxable threshold, and the bank will not deduct TDS on your interest income. Remember, this only applies if your total income is below the basic exemption limit.
Q5. Can I claim deductions for medical expenses under Section 80DDB?
Yes, you can claim deductions for medical expenses under Section 80DDB if you incur expenses for the treatment of specified diseases or ailments. The maximum deduction allowed is ₹40,000 for individuals below 60 years, ₹1 lakh for senior citizens (above 60 years). The treatment should be for diseases specified by the Income Tax Department, and you must have valid documents, including bills and medical certificates, to support your claim.
Q6. How do I file an ITR with income from multiple employers?
If you have income from multiple employers during the financial year, you need to consolidate the income from each employer’s Form 16. Add the salary income, deduct TDS as per the Form 16 details, and claim deductions based on eligible expenses such as insurance premiums, investments, and other tax-saving schemes. Ensure that your total income and deductions are correctly entered in the ITR, and verify the TDS details with Form 26AS to avoid mismatches.
Q7. What documents are required for claiming multiple deductions?
To claim multiple deductions, you will need several documents, including:
Form 16(s) from all employers
Investment proofs for Section 80C (e.g., PPF passbook, ELSS receipts)
Insurance premium receipts for Section 80D
Loan certificates for interest under Section 80E
Donation receipts for Section 80G
Medical bills and certificates for deductions under Section 80DDB
Bank statements showing interest income for Section 80TTA/80TTB Ensure that all documents are organized and submitted as required during the filing process.
Q8. How do I calculate deductions when switching jobs mid-year?
When switching jobs mid-year, it’s crucial to ensure that both employers have not already claimed deductions for the same expenses. For example, if you’ve already invested ₹1.5 lakh under Section 80C in the first half of the year, you can’t claim more deductions under the same section with your second employer. Consolidate your total income from both employers and make sure the deductions are calculated correctly. If you exceed limits, only the eligible portion can be claimed.
Q9. Can I claim home loan interest under Section 80E and 80EE?
Yes, you can claim home loan interest under both Section 80E and Section 80EE, but the eligibility criteria differ:
Section 80E: Allows deductions for interest paid on loans taken for higher education. It does not apply to home loans for property purchases.
Section 80EE: Provides deductions on home loan interest (up to ₹50,000) for first-time homebuyers, provided the loan is under ₹35 lakh and the property value is below ₹50 lakh. If you qualify, you can claim both, as they apply to different types of loans.
Q10. Are donations to charity deductible in the new tax regime?
Donations made to charitable organizations are deductible under Section 80G. However, this deduction is available only in the old tax regime, as the new tax regime does not allow most deductions. If you choose the new tax regime, you will not be able to claim deductions under Section 80G. In the old tax regime, donations are eligible for deductions subject to certain limits and conditions.
Q11. How can I track my tax deductions throughout the year?
You can track your tax deductions by maintaining a record of all eligible expenses and investments throughout the financial year. Use tools like personal finance apps, spreadsheets, or even online platforms to keep a record of your deductions. Ensure that you collect all receipts and documents as soon as you make investments or payments eligible for deductions. This will help ensure smooth filing during tax season.
Q12. Does pre-validating my bank account help in faster refunds?
Yes, pre-validating your bank account with the Income Tax Department ensures that your refund is processed quickly and directly credited to your bank account. Pre-validation ensures that the bank details provided are accurate, reducing the chances of delay. By linking your primary bank account to your PAN and submitting it during the filing process, you can receive your refund without unnecessary delays.
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