Think Beyond Section 80C, Here are Ten Ways How You Can Plan to Save Tax
Even if you add the National Pension Scheme (NPS) investments (Section 80CCD), you can claim an additional Rs 50,000, bringing the total available deduction to Rs2 lakh per year.
So the tax planning for the new financial year has begun and most salaried employees and professionals are busy exploring the possible investment avenues. Most of us know that the first word that comes to our mind when we think of tax-saving is Section 80C of the Income Tax Act. PPF, EPF, ELSS, 5-year fixed deposits, Insurance, Ulips are always the go-to investment options for the salaried class. But you cannot claim more than Rs1.5 lakh exemption in aggregate through Section 80C investments.
Even if you add the National Pension Scheme (NPS) investments (Section 80CCD), you can claim an additional Rs 50,000, bringing the total available deduction to Rs2 lakh per year. But if that is not enough for you, there are other sections which give you additional tax-saving exemptions besides Section 80C.
So here is the list of such deductions available which can help you reduce your taxable income.
1. Deduction for Mediclaim (Section 80D): As per this section of the Income Tax Act, an individual or a HUF (Hindu undivided family) can ensure his/her health by getting a mediclaim policy and can claim a deduction of Rs25,000 for self, spouse and dependent children. Additionally, you can get a further deduction of Rs25,000 for the premium of your parents’ policy. In case of parents who are also senior citizens, the maximum deduction goes to Rs50,000. But the premium payment should be made by any mode other than cash.
2. Deduction for expenditure on health of disabled dependent (Section 80DD): This section allows you to claim up to Rs75,000, citing expenses towards medical treatments for dependent spouse, children, or parents. Based on the extent of disability, the section allows claims of up to Rs1.25 lakh. Disability includes autism, cerebral palsy, and mental retardation.
3. Deduction for expenditure on a specified disease (Section 80DDB): This section allows you to claim up to Rs40,000 against expenses incurred towards treating specific diseases (for self, spouse, parents or dependent children) such as chronic kidney failure, AIDS, cancer, neurological diseases and so on. The claim can go up to Rs 1 lakh for senior citizens.
4. Deduction for interest paid on education loan (Section 80E): This section allows you to claim the interest amount being paid on education loan availed for self, children or spouse. There is no limit on the amount, but the deductions are valid until 8 years from the year of the first interest paid.
5. Deduction for interest paid on home loan (Section 80EE): This section allows you to claim up to Rs50,000 per annum towards interest paid on the home loan, which was availed to purchase a house for the first time. You will be eligible for claims under this section, based on conditions like the year of loan approval, loan amount, house value, and the name on which the property is registered.
6. Deduction for donations towards certain funds, temples (Section 80G): This section allows you to claim against the amount donated for charity and funds. However, the donated amount should be less than 10% of the adjusted gross total income.
7. Deduction for rent towards accommodation (Section 80GG): The eligibility criteria for claiming the deduction under Section 80GG is if your rent is Rs5,000 per month, or 25% of total income, or rent paid is less than 10% of total income, whichever is less. But this exemption is not applicable in case HRA is part of the salary package.
8. Deduction for donation to specified institutions (Section 80GGA): This section allows you to claim tax saving against donations offered to an institution carrying out scientific research or a government-approved college or a university. Taxpayers gaining income from profession or business are not eligible for deduction under this section. Deductions over Rs10,000 can only be claimed if donated in non-cash form.
9. Deductions for donations to a political party (Section 80GGC): The Section 80GGC allows deductions against political donations, without any limit.
10. Deduction for interest on a savings account (Section 80TTA): This section allows tax saving claims against interests earned up to Rs10,000 on a savings account (not FDs).
Get the best of News18 delivered to your inbox - subscribe to News18 Daybreak. Follow News18.com on Twitter, Instagram, Facebook, Telegram, TikTok and on YouTube, and stay in the know with what's happening in the world around you – in real time.
|Power Grid Corp||198.20||-1.52|
Recommended For You
- There is a Strong Medical Case For Using Masks And Air Purifiers Against Pollution
- Ranveer Singh Returns As Simmba for Sooryavanshi, Flexes Muscles for Camera
- Adorable Video Shows Man Dancing with Stray Dog in the Middle of the Night
- Arunachal Pradesh CM Rides Royal Enfield Interceptor 650 to Promote State Tourism
- Google Pixel 4, Pixel 4 XL to Launch Today: Here’s How to Watch the Live Stream