<\/span>What is the main difference between deduction and exemption in income tax? <\/span><\/h3>\n\n\n\nA deduction reduces your taxable income by a specific investment or expense amount, like Section 80C, while an exemption removes certain income from taxation altogether, like HRA. <\/p>\n\n\n\n
<\/span>Can I claim both tax deductions and exemptions? <\/span><\/h3>\n\n\n\nYes, most taxpayers under the old regime can claim eligible deductions and exemptions in the same financial year, subject to each section’s individual conditions and caps. <\/p>\n\n\n\n
<\/span>Are tax exemptions available under the new tax regime? <\/span><\/h3>\n\n\n\nMost exemptions and deductions are not available under the new regime, though a few, such as the employer’s contribution to NPS, continue to apply. <\/p>\n\n\n\n
<\/span>How do I decide the deduction vs exemption in income tax question for my own return? <\/span><\/h3>\n\n\n\nLook at whether the benefit reduces your income before or after computation, if it’s excluded upfront, it’s an exemption; if it’s subtracted afterward against an investment or expense, it’s a deduction. Most salaried taxpayers claim a mix of both under the old regime. <\/p>\n\n\n\n
<\/span>Is HRA a deduction or an exemption? <\/span><\/h3>\n\n\n\nHRA is a tax exemption, not a deduction as the eligible portion is excluded from your taxable salary before tax is computed, rather than subtracted afterward. <\/p>\n\n\n\n
<\/span>Which sections cover the most common tax deductions in India? <\/span><\/h3>\n\n\n\nSections 80C, 80D, and 24(b) cover the bulk of commonly claimed deductions, spanning investments, insurance premiums, and home loan interest with PPF, EPF, and ELSS\/SIP contributions among the most popular ways salaried taxpayers use up their Section 80C limit each year. <\/p>\n\n\n\n