Tax Saving Beyond Section 80C

With the financial year end closing in, tax payers should look forward to explore all possible ways to reduce their tax liabilities. While section 80C of the Income Tax Act remains by far the most popular tax saving route especially for salaried individuals, there are various other tools that one can use to take tax deductions beyond section 80c. Let us take a look at various tax saving options beyond Section 80C as listed in the Income Tax Act 1961.

Tax Saving on Annuity Policy (Section 80CCC): Premium paid for an annuity plan is eligible for tax deduction under section 80CCC of the Income Tax Act. The maximum benefit available for an individual under the section is limited to Rs 1 Lakh.

Saving Tax on Pension Schemes:  An individual tax payer is eligible for tax deduction by either the central government or the employer if he or she deposited any amount under the pension scheme notified by the government. The deduction is limited to 10% of the individual’s salary in the previous financial year under section 80CCD.

Education Loan Section 80E: Tax deduction is available for education loan taken for higher education for the individual, spouse or children under section 80E of the Income Tax Act. The deduction on education laon is valid for a period of eight years starting from the time one starts paying interest amount on the loan. The entire actual amount paid as interest on loan shall be admissible for deduction but no claim for deduction on the principle amount repaid is admissible.

Tax Saving on Health Policy under Section 80 D: Section 80D of the Income Tax Act, 1961 allows income tax concession up to Rs 15,000 for all health insurance premium paid for one’s own self, spouse and children. The tax exemption limit is raised to Rs. 20,000 for individuals with either parents of the assesse are above 60 years of age. This deduction can be claimed irrespective of whether the parents are dependent on the individual or not.

Medical Treatment Expenses: Medical expenses can be difficult as they can offset the overall financial planning in one shot. The Income Tax Act 1961 offers users some concessions on medical expenses.  Expenditure incurred by an individual for treatment of handicapped relative including dependant spouse, children, parents and siblings in allowed a tax deduction of Rs. 50,000. In case the person is severely handicapped like blindness or mental retardation, the deduction limit gets increased to Rs. 1 Lakh. Any disability over 80% is considered to be server under the existing rules. If the individual tax payer is undergoing treatment for a specific ailment of disease, a deduction up to Rs. 40,000 or the actual expenditure incurred whichever is lesser is available under section 80 DDB. A medical certificate from a registered medical practitioner working in a government hospital is mandatory to avail this deduction.

Charity and Donations Under Section 80G: All philanthropic donations one makes towards any charitable cause  to various trusts and approved charitable institutions qualifies for deduction under Section 80G of the Income Tax Act. Depending on the charitable institutions, donations can be either eligible for 50% deduction of complete 100% deduction.

Deduction on Rent under Section 80GG: Any self employed or salaried individual tax payer who does not receive any HRA can claim deduction under section 80CG of the Income Tax Act. The amount stipulated under section 80CG is either 25% of the total income or Rs 2000 per month or excess of rent paid over 10% of total income whichever is lower. The deduction however is not available if the individual’s spouse or children own any residential accommodation in India or overseas.