Income Tax News: Have you not yet completed your income tax savings? These three months have passed. Investing in them can result in tax deduction savings. In a fiscal year, there is only until March 31st to take advantage of tax advantages. Last-minute savings can prevent your taxes from being withheld in such a case. Usually, Section 80C is the first item that springs to mind when discussing income tax savings. Apart from 80C, there exist ten more options wherein investment can result in full tax reduction.
What is 80C ?
Up to ₹ 1.5 lakh in annual deductions from your taxable income are allowed under Section 80C for a variety of investments. In contrast, an individual’s contribution to designated pension plans may be deducted under Section 80CCC up to ₹ 1.5 lakh annually.
Exploring Alternate Tax-Saving Avenues
The most common method of avoiding income tax is 80C, but the majority of savings plans are subject to it, and the exemption only lasts for up to Rs 1.5 lakh. However, there are other ways where investing will result in no deduction of any kind, or if it does, a refund will be issued.
NPS and Section 80C
Under Section 80C of the National Pension System (NPS), you can save up to Rs 1.5 lakh in taxes. Additionally, you can save an extra Rs 50,000 under Section 80CCD (1B). This implies that you might save a total of Rs 2 lakh.
Unlocking Health Insurance Tax Benefits with Section 80D
Section 80D allows you to claim health insurance premiums. The number of beneficiaries and their age under 80D will determine the amount of tax exemption you are eligible for. You can claim tax savings of up to Rs 25,000, Rs 50,000, and Rs 1 lakh in this manner.
Unlocking Home Loan Tax Benefits
There are two ways to obtain a tax exemption on house loan repayment. In addition to the Rs 1.5 lakh tax exemption on the principal amount under Section 80C, you are also eligible for Section 24 tax exemption on the interest component. If the property is in your name and you live there, you are eligible for a tax exemption under this section up to a maximum of Rs 2 lakh.
The amount of tax exemption that you can claim for interest paid during the year is unlimited if you rent the house instead of living there. This means that any interest you pay falls within the tax exemption.
Unlocking Tax Benefits with Education Loans (Section 80E)
You are eligible to receive a tax exemption on any loans you have taken out for your children’s education. You can receive tax exemption on the interest component of your school loan under Section 80E. Depending on who is repaying the loan, either the parents or the child may benefit from this tax exemption. You can claim tax exemption on interest as much as you would like; there is no cap on this.
Unlocking Housing Tax Benefits
Rent is tax-exempt if you are salaried and your employer offers HRA. However, you are unable to claim a tax exemption on housing rent if you do not receive HRA. This is what occurs when you work independently or in the unorganised industry. For such individuals, the government offers Section 80GG as an option.
First-Time Homebuyer’s Advantage
If a person purchases their first home, they are eligible for an additional Section 80EE home loan interest exemption from the government, provided that they have never owned a home previously. You are eligible to claim additional tax under this provision up to Rs 50,000. This exception supersedes the exemption granted under Section 24.
This implies that first-time homebuyers qualify for an annual rebate on housing loan interest of at least Rs 2.5 lakh. This is contingent upon the property’s price being less than Rs 50 lakh and the loan amount being less than Rs 35 lakh.
Unlocking the Benefits of Section 80TTA for Interest Income
Additionally, interest earned from savings bank accounts is exempt from taxes. Any individual or HUF is eligible for tax exemption under Section 80TTA up to a maximum of Rs 10,000. Savings accounts from banks, co-ops, or post offices fall under this category.
Being a senior citizen is not a requirement for this tax exemption; it is available to everyone. Interest that exceeds Rs 10,000 falls under the other income category and is subject to taxation.
Unlocking Tax Benefits Through Section 80G Donations
You can also avoid taxes on this if you donate to charities. A donation made under Section 80G to an approved charitable organisation is exempt from taxes. Nevertheless, the full donation is not eligible for exemption.
Navigating Section 80DD for Tax Exemptions on Medical Expenses
You may claim your medical expenses under Section 80DD if you provide care for a disabled individual. A parent, sibling, child, or other family member could be that impaired individual. The degree of the disabled person’s disability determines the amount of tax exemption you will receive. The amount of tax exemption in this is between Rs 75,000 and Rs 1.25 lakh.
Medical Relief Beyond Limits
The cost of treating some illnesses, such as cancer, neurological disorders, or AIDS, is exceedingly high. Under section 80DDB, the government offers a tax exemption of up to Rs 40,000. Senior folks are eligible for a Rs 1 lakh tax exemption.
Keep watching our YouTube Channel ‘DNP INDIA’. Also, please subscribe and follow us on FACEBOOK, INSTAGRAM, and TWITTER