Although most of us see taxes as unwanted, this is the amount which goes into the development of a nation; infrastructurally and fundamentally. As a responsible and law-abiding citizen, paying taxes is one of the most important duties. It not only helps the nation develop but also boosts the economy. It should be the utmost priority to file the taxes on time and do our bit towards the nation. While you are honestly paying your taxes, this nowhere means you cannot save them whenever you can, legally. After all, all these tax-saving options are also either government provided or government approved. The government also is well aware of the public mindset (a democracy) and hence make available such avenues which help people save their money from being taxed and also side-by-side grow it.
REDUCING THE TAX LIABILITY
One of the most common and sought-after tax-saving options is Section 80C of the income tax act 1961. Every household which pays taxes is well-aware about it. There are many options under Section 80C which helps you save a portion of your money from being taxed. There is a maximum cap on this section which is Rs. 1.5 lacs, above which if you invest in avenues with 80C benefit, do not stand eligible for tax deductions.
Not to worry, there are several other options apart for 80C which offer tax-benefits, have a look;
- Section 80D Mediclaim
In the present uncertain times, there have been a lot of health issues happening which is not only troublesome to the physical health but also digs a deep hole in the family’s pocket. Hence having health insurance is very important in these uncertain times. There are a lot of Medi-claims which not only cover your hospital bills but also provide reimbursement for the period of sickness.
That is not all, having a Mediclaim policy also comes with another benefit, tax benefit. Under the section 80D of Income Tax Act, 1961, you can save up to Rs. 75000 from being taxed. There are certain conditions which need to be met in order to be eligible for this deduction:
- IRDA recognition and registration of the insurer is a must
- A maximum of Rs. 25000 for any individual, spouse, and children is allowed
- 25000 is additionally eligible for a rebate if paid as premium for the medi-claim policy of parents.
- 50,000 deduction is allowed in case the parents are senior citizens in point c.
- 5000 is allowed as preventive health check-up expense
- Section 80E under education loan
If you did not know earlier, there is a rebate allowed on the interest paid on education loan. The loan must be taken for higher education i.e. postgraduate or undergraduate. You can avail this rebate for up to 8 years beginning the year from which interest is paid. The only requirement is that the money should be used for the education of spouse, children, self or of someone under your legal guardianship.
- Section 80G donations
You can claim tax deductions under the Section 80G of Income-tax Act 1961, for donations you have made. There are a provision of 50% and 100% deductions with and without restrictions. The donations must be made under the Section 80G relief funds as notified by the government.
Some of the relief funds are:
- Prime minister national relief fund
- Swachh Bharat Kosh
- National defense fund
- Renovation of temples, mosques, churches
Note 1: Of the donations made, you need to keep the receipt in order to claim a deduction.
Note 2: Cash payment of more than Rs. 2000 is not eligible for any deductions
- Section 80GGC Donation to political parties
Any and all donations made to political parties are eligible for deductions without any upper ceiling. If you have made any deduction, you can claim a deduction on the entire amount of such donation. One restriction that is exercised on this mode is that the payment must be made in a way other than cash.
- Section 80EE interest benefit on the home loan
Yes, you can claim tax benefit on the interest you pay on your home loan. If you have taken a home loan then under section 80EE and section 24, you are eligible for a tax deduction towards the interest paid on your home loan. There are three conditions to this option:
- The loan amount must not be more than Rs. 35,00,000
- The property value must not be more than Rs. 50,00,000
- There should be no other property registered under the name of such individual who has taken the loan.
The next time you file your taxes, do not forget to claim your benefit under the above five sections apart form 80C alone.