Maximize Your Tax Savings: Strategies Beyond Section 80C
Discover lesser-known tax-saving opportunities to reduce your taxable income and keep more of your hard-earned money
Planning your taxes is a crucial part of personal finance, and you may increase your net income by making the most of your tax savings. Although Section 80C of the Indian Income your Act provides a deduction of up to âđ1.5 lakh, there are further options available to further reduce your liability. Here, we look at other options outside Section 80C for the fiscal year 2023-24 that can help you save additional money on taxes.
Section 80CCD(1B): Additional Deduction for NPS
National Pension System (NPS) contributions are covered under Section 80C, an additional deduction of âđ50,000 is available under Section 80CCD(1B). This deduction is over and above the âđ1.5 lakh limit under Section 80C.
Section 80D: Health Insurance Premiums
Under Section 80D, you can claim deductions for health insurance premiums paid for yourself, your spouse, children, and parents. The deduction limits are as follows:
Up to âđ25,000 for premiums paid for yourself, spouse, and children. (Mode of payment restricted to other than cash)
An additional âđ25,000 for insurance premiums for parents, which increases to âđ50,000 if your parents are senior citizens. (Mode of payment restricted to other than cash)
Moreover, an additional deduction of âđ5,000 is available for preventive health check-ups, making this an effective way to save on taxes while securing your family’s health. For this additional deduction you are allowed to make payment through any mode as you wish.
Section 80E: Interest on Education Loan
Education loans interest paid is deductible under Section 80E. There is no upper limit on the amount of interest you can claim as a deduction. The deduction is available for a maximum of eight years or until the interest is fully paid, whichever is earlier. This benefit is applicable for loans taken for higher education for yourself, your spouse, children, or a student for whom you are a legal guardian.
Section 80G: Donations to Charitable Institutions
Under Section 80G, donations made to certain approved charitable institutions and relief funds are eligible for tax deductions. The deduction can be either 50% or 100% of the donated amount, depending on the institution. However, the overall deduction should not exceed 10% of your gross total income. This not only helps reduce your tax liability but also allows you to contribute to societal welfare. To avail this deduction you must ensure that charitable institutions and relief funds are registered with income tax and approved. Make sure to receive proper receipt of donation which must mention PAN no. of charitable institution and their registration no.
Section 80GG: House Rent Paid
If you do not receive a House Rent Allowance (HRA) from your employer and still pay rent, you can claim a deduction under Section 80GG. The deduction amount is the least of the following:
âđ5,000 per month.
25% of your total income (excluding capital gains).
Actual rent paid minus 10% of your total income.
