Now I will be talking about income, how the income is spent, received and overview of deductions.

Before starting I want to brief a little about income. So basically Income refers to the money that is
is earned by an individual for providing service or as an exchange for providing a product.
The income earned by an individual is used to fund their day-to-day expenditures, as
well as fund investments. 

So the First question is

Where Does Income Come From?

There are various terms for income because there are various ways of earning income. Income

from employment or self-employment is wages or salary. Deposit accounts, like savings accounts,

earn interest, which could also come from lending. Owning stock entitles the shareholder to a

dividend, if there is one. Owning a piece of a partnership or a privately held corporation entitles

one to a draw. Some of the most common types 0f inc0me come from salaries, revenue from self

employment, commissions and bonuses, pensions, interest etc.

Second is

Where Does Income Go?

Most of the Income are used as Expenses for items or resources that are used up or consumed in

the course of daily living. Expenses recur because food, housing, clothing, energy, and so on are

used up on a daily basis.

For companies, make income earn during a specific period is obtained by summing all the
revenue earn by the business minus taxes and business expenses.

Taxable Income is the amount used to calculate how much tax an individual owes the
government. All the salaries, wages, dividends, interest received, pension, or capital gains
earned during the year are taken into account when calculating taxable income.

Overview of Deduction-

Deduction refers to claims made to reduce your taxable income arising from various
investment and expenses incurred by tax payer. Thus, income tax deduction reduces your
overall tax liability. It is a kind of tax benefit which help you save tax. However, the amount
of tax you can save depend on the type of tax benefit you claim.

There are various income deductions. Some of them are-

Deductions on Investments
Section 80C is one of the most popular and favourite sections amongst the taxpayers as it
allows to reduce taxable income by making tax saving investments or incurring eligible
expenses. It allows a maximum deduction of Rs 1.5 lakh every year from the taxpayers
total income.
It is important to note that overall limit including the subsections for claiming
deduction is Rs 1.5 lakh except an additional deduction of Rs 50,000 allowed u/s
80CCD(1b)

Insurance Premium

Pension Contribution

Section 80 TTA – Interest on Savings Account

Section 80E – Interest on Education Loan

Section 80EE – Interest on Home Loan

Section 80D – Medical Insurance

Section 80DD – Disabled Dependent

Section 80DDB – Medical Expenditure

Section 80U Physical Disability

Section 80G Donations

Section 80TTB Interest Income

And many more. That’s all from my side.