Tax Saving Tips

Apart from regular tax saving section 80C which are Life Insurance, PPF, NSC, and Equity Linked savings scheme, in which an individual can claim, tax deductions of up to Rs.1 lakh. There are other avenues that offer additional tax breaks to individuals. Here we are wish to share a small list you could explore.

Health Insurance

One among that is 80D under which you can claim up to Rs.15000/- in respect of the health insurance Premium which you pay premium for covering self or wife and the dependent Children. Also can claim Rs.15000 /-exemption on premium payments made for parents and a higher deduction of up to Rs.20000/-if one of your parents is senior citizen.

Ill dependent – Pay Lower taxes:

A chronic illness of a dependent can empty our life savings, and forfeiting full taxes in such cases is burdensome for any taxpayer. In this state you can avail up to Rs.40, 000(Rs.60, 000 if the dependent is a senior citizen) deduction per year , under Section 80DDB. Dependants include siblings, children, parents and spouses. Also to avail this inference, patient should be dependent on the tax payer , and should not have filed for such deduction separately.

Section 80DD- for physical & mental disability of special dependent

You can declare a deduction under section 80DD for an amount of Rs 50,000 (if the disability is less than 80%) or Rs 1 lakh (if the disability is 80% or more) for which you must obtain a certificate in FORM 10IA from a doctor working in government hospital with a prescribed qualification.

Meaning of Disability

Disability means a person suffering from 40% or more of any of the below disabilities. A severe disability condition is 80% or more of the disabilities.
a) Blindness and Vision problems
b) Leprosy-cured
c) Hearing impairment
d) Locomotor disability
e) Mental retardation or illness

Charity to noble causes count

Charitable contributions are deductible up to 10% of your income under Section 80G. Depending upon the institution to which the donation is being made, the deduction can be either 100% or 50% of the amount donated. You must ensure that you obtain a receipt from the institution and a copy of their income-tax exemption certificate.

Educational expenses of Children

It is well-known that the deduction under section 80C is available to an individual in respect of the tuition fees of his/her children with an overall limit of Rs 1 lakh. The deduction, however, is not available for capitation fees/donation collected by the school or college. There is another section in the Act (section 80E) which provides for deduction in respect of interest on loan taken for higher education.

The educational loan can be taken for any course pursued by the individual or the spouse or children of the individual post the senior secondary course or its equivalent. It is allowed for a maximum of eight years starting from the year in which the interest is first repaid.

Contributions to a political party

If you have contributed any amount to a recognized political party, you are eligible to claim a tax deduction ranging from 50 percent to 100 percent of the amount under Section 80GGC for individuals and Section 80 GGB for corporate organizations. One can contribute up to 10 percent of one’s gross total income to a political party.


Under section 80GG you can avail the tax benefits up to Rs.24000/- if you are self employed or if you don’t receive HRA from your employer. This is subject to some conditions.

Renting and Home loan in two different locations

Individuals today are constantly on the move for better job prospects. This could result in a person living in a rented place in the city he is working while repaying the loan for a home bought in his native city or any other city. In such a scenario, the rent that an individual pays is eligible for HRA exemption. Further, a deduction can be claimed on the interest paid for the housing loan used to purchase the property at the native place/any other city.

Let us assume your monthly basic salary is Rs 40,000 and HRA is Rs 16,000. Your monthly rent is Rs 16,000 and annual interest payment on your housing loan is Rs 1.45 lakh. In this case, of the total monthly HRA, Rs 12,000 will be tax exempt in your hands. Further, you can claim deduction under section 24(b) of the Income-Tax Act, 1961, on the interest payable on your housing loan.

For claiming HRA exemption, you need to submit copy of the lease agreement or rent receipts. For claiming deduction on housing loan interest, you need to submit a copy of the tax certificate issued by the housing finance company.

Repairs and maintenance of house property

You will never forget to claim deduction of interest on repayment of your home loan, but not many people know that any interest paid on home loan for reconstruction or repair of the “house property” qualifies for deduction of up to 30,000, subject to the overall limit of 1,50,000.

Exemption from capital gains

If you have made any capital gains on the sale of residential house property, such capital gains shall be exempt from tax, provided you purchase a new residential house one year before or within two years after the date of transfer; or you incur expenditure on construction of house property within three years from the date of transfer.

Consider, accomplish and file your investment declaration and seek optimal tax benefits. These deductions, along with the common ones like 80c, HRA, home loan EMIs, etc. can help you save a considerable amount of tax every year.

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