Most people look to Section 80C for tax deductions but often miss out on some other options that also come in handy for this purpose. Here’s looking at the top tax saving options other than Section 80C that taxpayers can avail of. There are several such options available that you should know more about.
Here’s looking at the top tax saving options that you can check out other than Section 80C-
- National Pension System (NPS)- This was launched in the year 2009 and under this scheme, every subscriber is required to open an account with the CRA (Central Recordkeeping Agency) and identification will be via the PRAN (Permanent Retirement Account Number). Under this scheme, you get an extra tax deduction for investments up to Rs. 50,000 under Section 80CCD (1B). The best part is that this deduction is provided over and above Rs. 1.5 lakh which is the maximum limit for deductions under Section 80C. The returns for this system are dependent on the asset class that is selected, namely equity, government debt or corporate debt among others.
- Rajiv Gandhi Equity Savings Scheme under Section 80CG- You can invest up to Rs. 50,000 in stocks which are approved under this scheme. Only first-time investors can get tax benefits. This scheme can offer you some tax benefits up to Rs. 50,000 and you can check out the same after consultation with your financial advisor.
- Section 80E (Interest on Education Loans) – This tax deduction can be claimed on the component which is allocated for repayment of interest on the education loan only and not on the principal component. This deduction is provided over and above Section 80C deductions with no maximum limit being there for claiming the same. Parents can take these loans on behalf of their children which ensures non taxation for the latter.
- Section 80GG (House Rent Allowance)- In case one is staying in a rented home and paying rents on a monthly basis, tax deductions can be claimed under this section. The deduction amount will be worked out on the basis of the city in which you are staying on rent. You can always talk to HR professionals in your company to learn more about the benefits available under this section.
- Home Loan Interest under Section 24- Under Section 24, you can get tax deductions on the interest repaid annually on your home loan. You can get this deduction up to Rs. 2 lakh. You can also claim an extra deduction of Rs. 50,000 on the home loan interest under Section 80EE, starting from financial year 2016-17. However, there are specific conditions to be met for claiming this additional deduction.
- Section 80D (Health Insurance) – In any case, every person should have a health insurance policy for himself/herself and other family members. You can get tax deductions up to Rs. 25,000 and senior citizens can get tax deductions up to Rs. 30,000 under this section. These benefits cover expenses which have been incurred towards preventive health check-ups as well. As a result, you should definitely claim tax benefits under this section apart from Section 80C.
- Section 80G (Donations) – You must have heard about donations being exempted for taxes. You can take advantage of Section 80G which offers tax benefits on amounts donated to NGOs and you can also contribute towards a good cause likewise. The deductions are only applicable in case donations are made via drafts or cash. The deductions can be 50% or 100% and you can claim this while filing your returns. You must have provided your PAN Card number to the NGO/institution where you donated.
- Section 80GGA (Donation for specified institutions)- A sub-section of Section 80G, Section 80GGA enables you to claim tax deductions on particular donations made to institutions which have been specified. In case donations are made to listed institutions for scientific or medical research or to colleges/universities approved by the Central Government, the amount that you have donated will be eligible to get deductions over and above Rs. 10,000 in case the contribution has been made in any other mode than paying cash. Bear in mind that the deduction will not be available for taxpayers earning income from profession/business. Contributions made through other modes than cash are eligible for deductions without any upper limit.
- Section 80GGC (Donations for political parties)- Another section which offers tax deductions is Section 80GGC which covers donations made to political parties. Those contributing to political parties can apply to claim deductions under this section and these will be equivalent to the amount which has been donated actually. There is no upper limit on deduction amounts that can be claimed under this section. However, payments can be made in any mode other than paying cash.
- Section 80DDB (Medical Treatments) – For particular diseases or ailments, there are tax benefits available under Section 80DDB. The deduction can be claimed on expenses of the person for treatment of these specific diseases. This is applicable for the individual filing returns and also his/her dependents. This tax benefit is unavailable for NRIs although HUFs (Hindu Undivided Families) can claim the same for members.
- Section 80TTA (Interest on Savings Account)- Not many know this but interest that is earned from keeping money in savings bank accounts or even in post office savings accounts can be claimed as a tax deduction. The maximum applicable amount that can be claimed is Rs. 10,000. This does not indicate that interest up to this threshold is income that is exempted. Instead, it should be marked as income from other sources in the return and the deduction can then be claimed under this section. Senior citizens have a separate section for claiming a similar deduction and this section is only for other citizens.
As you can see, there are quite a few other avenues which can help you claim more tax benefits other than Section 80C. Do your homework, consult your financial advisor and then take steps accordingly to maximize your benefits in this case.