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Tax Credits and Deductions: Do Not Leave Money on the Table
Arfa · 28 August 2026 · 5 min read
Credits and deductions can lower your final bill, but only if you claim them correctly. Here is how they differ and where people miss out.
Credit vs deduction
A deduction reduces the income on which tax is calculated. A tax credit reduces the tax itself, rupee for rupee, up to the limits set by law. Knowing which one applies helps you estimate your savings correctly.
Commonly available options
Depending on the year, credits and deductions may be available for charitable donations to approved organisations, contributions to approved pension schemes, certain investments, and education expenses. Zakat paid through the proper channel is also treated as a deductible item.
Eligibility conditions and caps change over time, so confirm them against the current law before you claim.
Keep proof of everything
Every claim should be backed by a receipt, certificate or bank record. If your return is selected for review, documented claims are accepted quickly, while unsupported ones can lead to notices and penalties.