Just with a view to capture an idea on the level of awareness of individuals, I keep asking many people on how to save tax. And the majority of advice that I receive from them are all dedicated to save by way of investments covered under section 80C. Today, when I have found that the number of people falling under this bracket is surging high, I have decided to bring that awareness through this article. Apart from section 80C, there are other alternatives as well that can bring the level of you tax payments down because of inherent tax deductions benefit. There are lots of financial products available in the market which offers these tax deductions. Following are the brief description of the available tax exemptions apart from section 80 C and the financial products offering these tax exemptions:
- Section 80 CCG – All individual residents are eligible to be covered under this section. If your gross total income does not exceed Rs. 10 lakh and you are an individual investor and are investing under equity scheme as a new investor, then you can claim tax deduction under this section. You can claim deduction of 50% of the amount that you have invested in equity shares up to maximum of Rs. 25,000.
- Section 80 D – This section is available for individuals and Hindu Undivided Families. This section is applicable on the medical insurance premiums paid for self, spouse or for dependent children. The maximum amount of deduction that can be claimed under this section is Rs. 15,000 and for senior citizens, it is Rs. 20,000.
- Section 80 DD – This section is available for resident individuals and Hindu Undivided Families. This section is applicable on the amounts paid for the maintenance including the cost of treatment and/ or insurance for the lives of dependent relatives who are physically disabled. The amount of deduction allowed is Rs. 50,000 and in case of severe disability, the maximum amount of deduction allowed is Rs. 1 lakh.
- Section 80 DDB – Resident individuals and Hindu Undivided Families are covered under this section. If you have paid medical treatment expenses for yourself or any dependent member of your family or for a member of HUF (if the assesee is HUF), then you can claim deduction under this section on actual expenses or Rs. 40,000. However, for senior citizens, the amount is Rs. 60,000.
- Section 80 E – Only individuals are covered under this section. If you have paid an interest on loan that you have borrowed for your own higher studies or for your spouse or your children, then you can claim the entire amount of interest paid as deduction under this section for a maximum period of 8 years.
- Section 80 G – This section is available for all assesses. If a person has paid donation/s to charitable trust/s, then he claim a deduction for either 100% or 50% of the amount paid as donation, depending upon the other terms and conditions laid down under this section of Income Tax Act.
- Section 80 CG – Any individual who is not getting House Rent Allowance is eligible to claim tax deduction under this section. Therefore, the deductions will be available on the actual amount of rent paid by these individuals during the relevant financial year. An individual can claim deduction on minimum of the following:
- 2,000 per month
- 25% of the total income of that financial year
- The difference of the actual rent paid and 10% of the total income
- Section 80 GGC – This section is applicable for all assesses except the Indian companies. If an assessee has made any monetary contribution to any political party of the country, then the assessee can claim the deduction in tax for the actual amount of contribution made.
- Section 80 TTA – This section is available for resident individuals and Hindu Undivided Families. The tax deduction is available on all interest amount from savings account other than the investments in time deposits or fixed deposits. The maximum amount of deduction allowed under this section is Rs. 10,000.
- Section 80 U – This section is available for resident individuals and Hindu Undivided Families. Only the assessee or the tax payer is eligible to claim tax deduction under this section. If the tax payer is suffering from any severe disability, then the tax deduction can be claimed for a maximum amount of Rs. 1 lakh otherwise the amount is Rs. 50,000.
So, the tax deduction is not limited to options available under section 80 C and there are other options available as well. Keep saving the tax payable amount and enjoy your income.