Ways to save tax other than Section 80C

As the date 31st March comes closer tax assessees try to find different ways to save their hard-earned money from being taxed (of course in a Positive manner) and that’s why here  I am  for explaining various ways through which an assessee can save his/her tax lawfully.

Now whenever we talk about tax savings, we only think about LICs or Home loans or NSCs or FDs etc . and all these options come under Section 80C (quite popular) and that is why most of the assessees try to invest in these options only and limit their savings oninvestment upto Rs. 150000/- only.

But we need to think beyond section 80C, so that there might be an additional tax saving which might have been missed by many of us in earlier tax periods.

So here is the list of Investment options other than Section 80C which can help us save tax:

1. Section 80D: Popularly known as deduction for Mediclaim.

So as per this section an individual/HUF can insure his/her health both physically and financially.

As far as financial concerns, an individual/HUF can claim a deduction of Rs.25000/- for self, spouse and dependent children.

And additionally, Rs. 30000 for their parents too (if senior citizen; otherwise Rs.25000/-)

Note: The deduction for senior citizens has been increased to Rs.50000/- as announced in Budget 2018 (from FY 2018-19).

Note: payment should be made by any mode other than cash.

2. Section 80G: Popularly known as the donation deduction

It provided tax deduction if one has donated any amount to any NGO (Registered u/s 80G),

Or charitable trust or any Prime minister yojna etc.

There is a list mentioned on Income tax website.

Note: Payment should be made by any mode other than cash

Maximum deduction available would be 50% or 100% of the amount donated as per the case.

Please mention PAN of the Donee while claiming deduction.

3. Section 80GG: Popularly known as deduction for Rent paid

Usually people get HRA from their employers and get it deducted while filing ITRs. But in some cases when HRA is not a part of  the salary and rent is being paid for house then this deduction comes as a boon and one can easily claim a deduction here (some conditions need to be fulfilled)

Deduction shall be least of the following-

  1. 5000/- per month;
  2. 25% of the total income (some exclusions are there)
  3. Actual rent paid less 10% of the total income (some exclusions are there)

4. NPS Scheme: This scheme offers you additional tax deduction for Rs.50000/- other than Section 80C.

5. Section 80E: Deduction for interest paid on Educational loan – Best part is that there is no maximum limit. This deduction is available only for an individual.

Note: No Tax benefit is allowed for the principal repayment. (Maximum deduction period is 8 years)

6. Section 80EE: This is available to an individual for the amount paid as interest on loan taken for the purchase of a residential property. The maximum deduction that can be claimed under this section is Rs 50,000 per annum.

There are a few conditions one has to fulfil to avail this deduction (eg. Loan period April 2016 to March 2017, loan amount less than Rs. 35 lakhs, house value less than Rs. 50 Lakhs, should be the only house property in assessee’s name).

7. Section 80TTA: This section is for deduction on Interest earned on savings a/c. The maximum deduction is upto Rs. 10000/-. But this is not meant for interest earned on Fixed deposits.

Thanks & Regards,
CA Tanvi Gupta
ACA, B.com, DISA

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