Before planning your taxes one should be aware of the total income and tax liability in order to be smart tax saver. The government has also provided with many plans using which individuals can make better investment decision along with tax saving options. Sec 80c is the section for deduction of income tax which person get benefit by investing in specified category mentioned in the said section of Income Tax Act, 1961.
The benefit of the section is available to the extent of limit, i.e., Rs.1, 50,000. There are several schemes under SEC 80C like ELSS, PPF etc. Individuals often get stuck with 80C tax benefits only during tax planning. While there is little doubt 80C investments are best for tax saving purposes, there are other options which can help you save tax if you know them. So let’s discuss some these other options.
NPS: The Government of India (GOI) launched the National Pension System for individuals in May 2009. Under the NPS, each subscriber will open an account with Central Recordkeeping Agency (CRA), which will be identified through unique Permanent Retirement Account Number (PRAN). The NPS offers you additional tax deduction for the investment up to Rs. 50,000 in under subsection 80CCD (1B). This is over and above the deduction of Rs. 1.5 lakh available under sec 80C of Income Tax Act. 1961. Returns would depend on the asset class that you choose. For example, you could select equity, which is a high risk instrument or corporate debt or government debt.
Interest on education loan (Section 80E) the deduction is allowed only on the interest repayment part, not on the principal amount of education loan. Means that only interest repayment is available for tax deduction while filing income tax return. This deduction is over and above the 80C limit and there is no maximum limit on claiming deduction under 80E. Not many are aware of the scheme, and one needs to educate people more on this section and its benefits. It is better parents take the loan on behalf of the children, in case the child is not taxable. This way they can save on taxes.
House rent allowance (Section 80GG): If you are staying in a rented apartment or house and paying rent, you can claim tax deduction under Sec 80GG of the Income Tax Act. The amount of deduction is based on the city that you are residing. Interest on Home Loans The limit on deduction on home loan interest under Section 24 was raised to Rs 2 lakhs from Rs 1.5 lakhs earlier. An additional deduction of Rs 50,000 on home loan interest can be claimed starting financial year 2016-17 under Sec 80EE of the Income Tax Act. However, to be able to claim this deduction, you must meet certain conditions. The principal amount continues to be a part of the overall benefits under Sec 80C.
Health Insurance (Section 80D): Individuals should take a health insurance policy, which would enable them save tax up to Rs 25,000 in case of ordinary citizens and Rs 30,000 in case of senior citizens. So, one can go ahead and take a good health insurance policy. The Sec 80D benefits also include the benefits on expenses incurred towards preventive health checkups. Apart from the tax benefit, it is important to remember that health insurance coverage is a must for individuals.
Medical treatment under Sec 80DDB: For certain specific diseases, Income Tax Act offers tax benefits to an individual under section 80DDB on the basis of expenses incurred by him for the treatment of such diseases or ailment. This is not only for the person filing the tax returns, but, also for individual’s dependents. However, this tax benefit is not available for Non Resident Indians. In case it is a Hindu Undivided Family, one can claim it for members of such a HUF.
👉 Click here to read the latest Gujarat news on TheLiveAhmedabad.com