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ITR Filing: How to save Income Tax? Check all possible ways here


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As the 31st March deadline approaches, taxpayers are in a rush to find more tax-saving options, especially for those who have already exhausted their section 80C limits. You can use below ways to save tax on your hard earned income.

Tax Saving Investment OptionsTax Benefit Under Section
Life InsuranceSection 80C (Premium) Section 10(D) (Death / Maturity)
Pension PlansSection 80CCC(sub-section under Section 80C)
Health insurance or MediclaimSection 80D
NPSSection 80CCD
Tax-saving mutual fundsSection 80C Section 10(D) (Death/Maturity)

In case, you have already claimed tax benefits under section 80C, then Here are some additional avenues for saving taxes beyond section 80C.

Ways to save Income Tax beyond 80C

Health Insurance Premium (Section 80D):

  • Taxpayers can save taxes under section 80D by opting for health insurance for themselves or their family members, including their spouse, children, and parents.

Interest on Home Loan (Section 24):

  • Deductions on the interest paid on a home loan can be claimed under Section 24. The maximum deduction on home loan interest allowed is Rs. 2 lakh for self-occupied properties. For let-out property, there is no limit; the entire interest amount can be deducted.

Medical Expenses for Disabled Dependents (Section 80DD):

  • Taxpayers with disabled dependents can claim deductions for expenses incurred for medical treatment, training, and rehabilitation of the disabled person under Section 80DD. The maximum deduction allowed ranges from Rs. 75,000 to Rs. 1.25 lakh, depending on the severity of the disability.

Donations to Charitable Institutions (Section 80G):

  • Donations to authorized charitable trusts or specific relief funds that qualify for deductions under Section 80G can be a good option to save taxes. The deduction amount depends on the eligibility for 100% or 50% deduction of the donated amount.

Interest on Education Loan (Section 80E):

  • Taxpayers who have taken an education loan for higher studies for themselves, spouse, children, or a student for whom they are a legal guardian can claim deductions on the interest paid under Section 80E.

These options provide taxpayers with additional avenues to save taxes beyond the section 80C limit. It’s important to consider these options and plan investments in advance to maximize tax savings. Apart from this, you can also utilize tax saving instruments to save your income tax.

Tax Saving Instruments

When it comes to tax-saving instruments, there are several options available under different sections of the Indian Income Tax Act, 1961. Here are some key tax-saving instruments and the sections under which they provide tax benefits:

Fixed Deposit (FD)

Tax saver Fixed Deposits offer tax deduction under section 80C of the Indian Income Tax Act, 1961, with a maximum deduction of Rs. 1.5 lakh. The lock-in period for such FDs is 5 years, and the interest earned is taxable. The interest rates usually range from 5.5% – 7.75%.

Public Provident Fund (PPF)

Contributions to the PPF account earn a guaranteed rate of interest, and individuals can claim deductions under Section 80C up to Rs 1.5 lakh in a financial year on these deposits.

Unit Linked Insurance Plan (ULIP)

ULIPs allow tax savings under sections 80C and 10(10D) of the Income Tax Act, 1961. They offer the flexibility to choose between equity funds, debt funds, or both.

National Savings Certificate (NSC)

NSCs encourage small to mid-income investors to invest while saving on income tax under Section 80C. The principal amount deposited is eligible for tax deductions.

Senior Citizen Savings Scheme (SCSS)

SCSS is a government-sponsored savings instrument for individuals above the age of 60, offering tax deductions under Section 80C up to the limit of Rs. 1.5 Lakh.

Life Insurance

Premiums paid towards life insurance are covered under Section 80C of the Income Tax Act up to a maximum of Rs 1.5 lakhs. The proceeds on death/maturity are tax-free under Section 10(D).

Pension Plans

Contributions towards pension plans are covered under Section 80CCC of the Income Tax Act, with the aggregate limit of deduction under all the sub-sections of Section 80C not exceeding Rs 1.5 lakhs.

Health Insurance or Mediclaim

Health insurance offers tax benefits under Section 80D, with a tax benefit of up to Rs 20,000 for senior citizens and Rs 15,000 for others.

New Pension Scheme (NPS)

Contributions made to the NPS are covered under Section 80CCD of the Income Tax Act, with the aggregate limit of deduction not exceeding Rs 1.5 lakhs.

Tax-Saving Mutual Funds

Investments in tax-saving mutual funds, also known as equity-linked savings scheme (ELSS), qualify for tax benefits under Section 80C of the Income Tax Act up to a maximum of Rs 1.5 lakhs.

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