Best Ways To Save Tax Excluding 80C

While most taxpayers are aware about 80C, there are several other tax saving options that can be utilized

To reduce the burden of heavy taxes, a number of tax saving options have been made available. These encourage people to invest and are aimed at enhancing the economic well-being of taxpayers. One of the most popular is the deductions available under Section 80C.

What are tax benefits under Section 80C?

Section 80C – Taxpayers can claim deduction of up to Rs 1,50,000. It covers payments made towards provident fund, life insurance premium, tuition fees, subscription to specific equity shares, national savings certificate, housing loan principal, etc.

Section 80CCC – Deduction can be claimed for payments made towards an annuity plan of LIC or any other pension scheme from another insurer.

Section 80CCD(1) – Payment made towards pension scheme of central government can be claimed as deduction. The total deductions from these sections are limited to Rs 1,50,000.

Section 80CCD(1B) – An additional deduction of Rs 50,000 is allowed towards payment of any pension scheme of central government. This is excluding the deduction claimed under 80CCD (1).

Section 80CCD(2) – Deduction is allowable for payment made as contribution made by the employer towards the pension scheme of central government. Deduction is limited to 10% of salary in case of PSU or another employee. Max allowed deduction is 14% of salary in case of central government or state government employee.

Section 80CCH – This covers the contributions made to Agnipath Scheme. The entire amount contributed is allowed as deduction during the computation of total income. The contribution can be made by the individual enrolled in the Agnipath Scheme as well as the contributions made by the Central Government.

Ways to save tax other than 80C

Now, let us take a look at some tax saving options in addition to 80C.

Section 80D – This covers health insurance premiums as well as payments made towards preventive health check-ups. In case of self / spouse or dependent children, the deduction allowed is up to Rs 25,000. For senior citizens, the deduction is Rs 50,000. These amounts include Rs 5,000 for payments made towards preventive health check-ups. For parents, the deductible amount is Rs 25,000 / Rs 50,000 (senior citizen). Rs 5,000 deduction is included in the said amount.

Section 80DD – This deduction is for payments made towards medical treatment or maintenance of a disabled dependent. The taxpayer can claim a flat deduction of Rs 75,000 in case of a person with normal disability. The deduction is higher at Rs 1,25,000 in case of a person with severe disability of more than 80%.

Section 80DDB – This is for payment made for treatment of specified diseases. It is allowed for both self and dependent. Standard amount is Rs 40,000, whereas for senior citizens, a deduction of Rs 1,00,000 is allowed.

Section 80E – This is for interest paid for loan for higher education. The total amount paid is allowed as deduction.

Section 80EE – This is for interest paid on loan that was meant for acquiring a residential house property. The sanctioning date should be between 1st April 2016 to 31st March 2017. Max deduction limit is Rs 50,000.

Section 80EEA – This is applicable when deduction is not claimed under 80EE. This is for interest on loan for residential house property acquisition, when the loan is sanctioned between 1st April 2019 to 31st March 2022. Max allowed deduction is Rs 1,50,000.

Section 80EEB – This is for interest paid on loan meant for purchase of an electric vehicle. The loan should be sanctioned from 1st April 2019 to 31st March 2023. Max allowed deduction is Rs 1,50,000.

Section 80G – This covers donation made to various charitable institutions and notified funds. 100% deduction is allowed when payment is made through any bank. In case of cash donations, only Rs 2,000 is eligible for deduction.

Section 80GG – This covers the rent paid for house. It covers self-employed individuals or when the salary does not include HRA. The least of the following three amounts is taxable – 1). Minimum rent paid @ Rs 5,000 per month. 2). rent paid minus 10% of total income. 3). 25% of total income.

Section 80GGA – This covers donation made towards rural development or scientific research.

Section 80GGC – This covers donation made to any political party of electoral trust.

Section 80TTA – This covers interest income from savings bank account for non-senior citizens. Max deduction limit if Rs 10,000.

Section 80TTB – This covers interest on deposits held by resident senior citizens. Max limit is Rs 50,000.

Section 80U – This is available to taxpayers with disability. A flat deduction of Rs 75,000 for a person with disability. For severe disability, the deduction allowed is Rs 1,25,000.