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Section 80C is the most well-known provision of the Income Tax Act of 1961, under which rebate of up to Rs. 1.5 Lakh is granted on several loan products and other investment tools.
However, you should also be aware of numerous other instruments aiming to reduce your taxable income. Such tax saving options other than 80C allows you to increase your annual savings through substantial income tax returns.
Since the Income Tax Act maintains several provisions for tax returns, an individual might not be aware of the regulations simultaneously. This can cause them to lose out on funds through redundant tax payments, reducing their annual savings respectively.
We aim to help you keep track of your total taxable income by describing the various provisions which are tax-saving other than 80C in a nutshell.
There are other sections that give you additional tax-saving exemptions besides Section 80C. While many are available under Section 80 itself, some belong to other sections. Let see what they are from the below table.
To encourage self-financed health insurance, there is a tax incentive. Section 80D allows for tax deductions from the total taxable income towards the payment of health insurance premiums as well as expenses incurred towards healthcare. Do check the policy document to ascertain if premiums paid for it qualify for tax deduction under Section 80D.
The limits to claim tax deduction under Section 80D depends on who all are included under the health insurance cover and their age. Hence, depending on the taxpayer’s family situation, the limit could be ₹ 25,000, ₹ 50,000, ₹ 75,000, or ₹ 1 lakh.
This tax-saving option is available primarily to families of handicapped persons. It is applicable to individuals and Hindu Undivided Families (HUFs) on the amount spent on rehabilitation of handicapped dependent relatives.
The deduction will be applicable on:
To save tax under this particular section, there are specific deduction limits as well. They are as follows.
Further, a disability certificate from the concerned medical authority will be required for claiming this tax deduction.
Under this section, a resident individual or a HUF (Hindu Undivided Family) can claim a deduction of INR 40,000 for expenses incurred towards treatment of certain specific ailments for himself or his dependents. In case both the individual or HUF is a senior citizen, they can ask for the deduction of up to INR 1 lakh, which was INR 60,000 and INR 80,000 for senior citizens and super-senior citizens respectively until FY 2017-18.
Borrowing to realize higher education dreams is common these days. Students who have availed an education loan to pursue their education are provided a tax benefit on the repayment of the interest component of the loan under Section 80E. This tax benefit can be claimed by either the parent or the child (student), depending on who repays the education loan to start claiming this deduction.
This tax deduction is also available only on taking an education loan from institutions and not from family members or friends and relatives. Taxpayers can claim the deduction from the year they start repaying the interest on the education loan and in the seven immediately succeeding financial years or until the interest is paid in full, whichever is earlier. There is no limit to the deduction claimed on the interest repayment.
It is for the deduction on home loan interest for the first-time home buyers.
For the FY 2017-18 and 2017-16
To claim the deduction, their property value should not be more than fifty lakhs rupees, while the loan is of less than thirty-five lakhs rupees.
For the FY 2013-14 and 2014-15
In this case, the property value must not exceed forty lakhs rupees while the loan amount is twenty-five lakhs rupees or less.
This section offers tax saving options in the form of donations to social causes. These donations are deductible upto 50% or 100%, depending on the charitable institution in question. The list includes Prime Minister’s National Relief Fund, National Children’s Fund, Swachh Bharat Kosh, Jawaharlal Nehru Memorial Fund, and numerous other charities.
If you are salaried but do not receive HRA because you work in the informal sector or because you are self-employed, you can claim deduction towards rent paid under Section 80GG up to ₹ 60,000 in a financial year. This deduction is not available to taxpayers who own a house but live in a rented house in the same city. It cannot be availed by taxpayers who own a house in another city and claim tax deduction under Section 24 towards repayment of home loan interest on that house.
The deduction under this section is allowed on the lowest of the three conditions, which will be ₹ 60,000:
a) At least 25% of the total income, excluding any capital gains. This will be ₹ 1.5 lakh on an annual income of ₹ 6 lakh.
b) Actual rent minus 10% of income. This would be ₹ 84,000 if you were paying ₹ 12,000 monthly rent (₹ 1.44 lakh – ₹ 60,000)
c) Or ₹ 60,000
An Indian company can ask for a deduction equal to the amount contributed to a political party or electoral trust under Section 80GGB in non-cash mode. Whereas, the section 80GGC defines the same deductions, except the fact that the contribution should be done by an individual taxpayer
Total interest income generated from savings account deposits can be claimed under Section 80TTA. Nonetheless, such deduction in taxable income is only limited to ₹10,000 annually.
If you maintain multiple savings accounts in different banks, the total cumulative interest is considered, and is taxed under ‘income from other sources’.
If such interest income exceeds ₹10,000 in a year, only the excess amount over the cap is taxed at rates depending upon aggregate annual income.
Disabled individuals can claim compensation in the form of tax waivers under Section 80U. Such disability has to be certified by a registered medical authority with at least 40% impairment.
Incapacitated individuals suffering from 40-80% disability can claim ₹75,000, while people suffering from higher than 80% disability are entitled to maximum ₹1.25 Lakh through tax benefits.
A resident Indian patentee can claim a deduction of upto Rs.3 lakhs on income earned through royalties for a patent registered on or after 1st April, 2003 under the Patents Act 1970.
Taxpayers can save additional tax by investing up to ₹ 50,000 in NPS. This is over and above the benefit, they can claim on contributions under Section 80c. They also have the option of utilizing NPS for the ₹ 1.5 lakh limit of Section 80c. This combination will take total deduction one can claim with NPS to ₹ 2 lakh.
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