Exhausted 80C limit? Here are 7 other tax-saving investment options for you
Let’s take a look at the tax-saving options other than Section 80C to turn you into a smart tax saver
New Delhi: Individuals who are looking to save tax can invest under 80C of the Income Tax Act. This is one of the most preferred investment avenues among salaried and other individuals. Under the income tax act, it allows the deduction of up to Rs 1.5 lakh from the gross taxable income of the taxpayer.
Some of the options to claim the tax benefit under this section include life insurance premium, PPF, EPF, and tax-saving fixed deposits. However, there is a lot more to tax planning than Section 80C which helps you further reduce your tax liability.
Let’s take a look at the tax-saving options other than Section 80C to turn you into a smart tax saver.
Section 80CCD: National Pension Scheme: Beyond the contribution of Rs 1.5 lakh under Section 80C, you can invest an additional Rs 50,000 in NPS which can be claimed as tax deduction under Section 80CCD. This gives you the option of claiming a tax deduction of up to Rs 2 lakh every year by investing in NPS.
Section 80D: Payment of health insurance premium: Under Section 80D of the Income Tax Act, you can claim a tax deduction for premiums paid for your family members and your health insurance. This section allows you to claim a maximum deduction of Rs 25,000 per year on premiums paid for yourself, your spouse, and your children. You are eligible for an additional deduction of Rs 25,000 if you are paying medical insurance premiums for your parents, taking your total deduction to Rs 50,000.
Moreover, if the person is below 60 years with parents above 60 years of age, the maximum exemption limit under this section is Rs 75,000. And, if both the individual and his/her parents are above 60 years, then a total of Rs 1,00,000 can be claimed under this section.
The amount spent on preventive health check-up is also eligible for deduction under section 80D – maximum limit of Rs 5,000 for self or family, including parents.
Section 80E: Repayment of an education loan: The amount paid as interest for an education loan for self, spouse, children, or any student to whom you are a legal guardian, can be claimed as a tax deduction under this section. There is no limit to claim as a deduction for interest paid in a financial year. You can claim the deduction from the year you start repaying the education loan till the next seven years or until the total interest is paid, whichever is earlier. Moreover, this tax deduction can only be claimed if the loan is taken from an approved financial institution and not from any family member or friends. It can only be availed for an education loan taken for higher studies.
Section 24: Interest payment of a home loan: Taxpayers can claim the amount paid as the interest component of a home loan as a tax deduction under Section 24 of the Income Tax Act. The maximum limit under this section is Rs 2 lakh which can be availed as interest payment of a home loan for a self-occupied property. However, if you are not occupying the property and is rented then there is no maximum limit, and you can avail yourself of the whole interest amount as a tax deduction.
Section 80EE: Interest payment of the home loan for first-time buyers: If you have not owned any other house property (first-time homebuyer), then you can claim a deduction of up to Rs 50,000 under Section 80EE. This amount is above the tax benefit of Rs 2 lakh for repayment of home loan interest under Section 24.
The conditions to avail of this deduction include that the value of the house should be below Rs 50 lakh, and also the loan amount should be Rs 35 lakh or less. Furthermore, the home loan should be sanctioned between April 1, 2016, and March 31, 2017.
Section 80EEA: Interest payment of the home loan for first-time buyers: If you have not owned any other house property (first-time homebuyer), then you can claim a deduction of up to Rs 1,50,000 under Section 80EEA. This amount is above the tax benefit of Rs 2 lakh for repayment of home loan interest under Section 24.
The conditions to avail of this deduction include that the stamp duty value of the house should be below Rs 45 lakh. Furthermore, the home loan should be sanctioned between April 1, 2019, and March 31, 2020.
Section 80GG: Rent paid for accommodation: This deduction can only be claimed if you do not get a house rent allowance (HRA) as part of your salary, or if you are a self-employed person. To avail of this deduction, you need to submit Form 10BA. You can claim a deduction of up to Rs 60,000 under this section.