Income Tax return filing: 5 investment options other than Section 80C to save more
If you fall in the income tax slab, you need to do tax planning, and for that you should be aware of total income and tax liability to save your tax. Most of us do our savings that fall under Section 80C of the Income Tax Act, 1961 for deduction of taxes. An individual get benefit by investing in specified category mentioned in this section as there are benefit available up to Rs 1,50,000. There are many schemes under SEC 80C including ELSS, PPF etc through which we can save our tax.
Individuals often get stuck with 80C tax benefits only during tax planning, but there are other investment options which can help you save tax if invested smartly. Here are 5 best tax saving options other than Sec 80C which you would like to know. Image source: Reuters
1. Interest on education loan
Under Section 80E, the deduction is allowed only on interest repayment, not on principal amount of education loan. Therefore, only interest repayment is available for tax deduction while filing income tax return. This is over and above the 80C limit and there is no maximum limit on claiming deduction under 80E. This is lesser known fact, therefore, people need to be educated people about this section and its benefits. Image source: Reuters
2. House rent
Under Section 80GG of the Income Tax Act, you can claim tax deduction if you are staying in a rented apartment or house and paying rent. The amount of deduction is based on the city you are residing. For availing benefit under this section, you should get details from the HR department on the exact tax benefits that you would get. This can be major source of tax saving for individuals. Image source: PTI
3. Home Loans
Under the NDA government, Finance Minister Arun Jaitley increased the limit on deduction on home loan interest under Section 24 to Rs 2 lakh from earlier limit of Rs 1.5 lakh. Thus 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. In order to claim this deduction, you should meet certain conditions. Image source: PTI
4. Health Insurance
Under Section 80D, you can get the benefits on expenses incurred towards preventive health check ups. If you have taken a health insurance policy, it would enable you to save tax up to Rs 25,000 in case of ordinary citizens and Rs 30,000 in case of senior citizens. This is another tax option that you can avail apart from the usual 80C benefits. Image source: Reuters
5. National Pension System
The National Pension System for individuals was launched in May 2009, under which you can save additional tax for investment up to Rs 50,000 under subsection 80CCD (1B). This is over and above the deduction of Rs 1.5 lakh given under Section 80C of Income Tax Act. You can open an account with Central Recordkeeping Agency (CRA), and this will be identified through unique Permanent Retirement Account Number (PRAN). Image source: Pixabay
There are schemes including Rajiv Gandhi Equity Savings Scheme under Section 80CG, donations made under Section 80G, and Medical treatment under Section 80DDB which can help you save your income tax. Image source: Pixabay