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It always pinches us when our hard-earned money is deducted as taxes. Our taxable income gets reduced quite a bit because of the various taxes imposed on us. Hence, it makes sense for us to make investments that we can claim as tax deductions.
Most of you are aware of Section 80C and the investments you can make under the section. mymoneykarma now gives you eight tax-saving investments above 80C. This will free up your hard earned money for fulfilling your wishes.
Section 80C is the most renowned section of the Indian Income Tax Act. There are numerous tax saving options under 80C, such as ELSS and PPF. While investing under 80C is very popular, we bring you tax-hacks other than Section 80C.
The National Pension System was launched by the Indian government in 2009. The NPS offers a tax deduction for investments made up to Rs. 50,000, in addition to the deduction of 1.5 lakh rupees available under Section 80C. Your returns, however, depend on the asset class you have chosen. Usually, it is advisable to select a high-risk instrument like government debt.
This is another scheme available for tax-saving. Under this, you can invest up to Rs 50,000 in approved stocks. But this scheme is available for you only if you are a first-time investor. This scheme was introduced under the UPA regime and has not been promoted aggressively. A supposed overhaul of the project hasn't come through yet.
You can claim the interests you pay on the active education loans you possess, if you have any. The deduction can be only on the interest repayment part, not on the principal of the education loan. That means only the interest repayment is available for a tax deduction while filing an income tax return.
This deduction is available for saving above Rs. 1,50,000, and there is no maximum limit on claiming deduction under 80E. Parents can take up this tax-saving option on behalf of their children, as children are not taxed. It is not a popular scheme, and not many are aware of it.
If you are staying in a rented apartment or house and paying rent, you can claim the amount as a tax deduction under Sec 80GG of the Income Tax Act. The amount of the deduction is based on the city that you are residing in. In case you have queries, it is best to talk to the HR department on the exact tax benefits that you would get. This is a significant tax hack that you should take note of.
An additional deduction of Rs 50,000 on home loan interest can be claimed under Sec 80EE of the Income Tax Act. This option is however not a very popular one.
You should take a health insurance policy, which would not only take care of your medical expenses but also enable you to save tax. The current IT norms allow a deduction of up to Rs 25,000 in the case of ordinary citizens and Rs 30,000 in case of senior citizens. So, you can go ahead and take a good health insurance policy.
This is a tax hack that you can utilize apart from the usual 80C benefits. The Sec 80D benefits also include the gains on expenses incurred towards preventive health check-ups.
Section 80G of the income tax law provides tax benefits on the amount donated to NGOs. So, you can be generous to the causes you believe in, to your heart's content. However, the deductions can be made if you are donating by cash or draft only. The limit of the deduction can be either 50% or 100%.
You have to claim this deduction when you file your tax returns and quote your PAN to the institution you donated. If you are unsure about the cause you want to support, there is an exhaustive list of institutions and establishments that you can donate to.
For certain specific diseases, Income Tax Act offers tax benefits to you under section 80DDB from expenses incurred by you for the treatment of said diseases or ailments. This tax-saving option is not only for the people filing tax returns but also for dependents of such people. However, this tax benefit is not available for Non-Resident Indians.
As law-abiding taxpayers, you have every right to look for ways to save your hard-earned money. When the government offers such great options to optimize your savings, why shouldn’t you utilize them?
Knowing about various tax-saving options can be advantageous for you; now that you do, go ahead and save more!