How to save tax apart from 80C and home loan

It’s a shared experience that we often need to fully appreciate the importance of tax planning once we see our first paycheck. The deductions can be a shock, clarifying why tax planning is crucial to managing our finances. With the real estate company in Bangalore, discover effective tax-saving strategies beyond Section 80C and home loans.

Indian tax laws have multiple ways to lower the taxable income. Most people know about and use the ₹1.5 lakh deduction under Section 80C.

However, many of us skip other tax-saving options. We typically stop after using the Section 80C deduction, mainly because we don’t know the alternatives. Explore tax-saving options beyond 80C tax for maximum benefits.

How to save tax apart from 80c and home loan

Every taxpayer can reduce taxes by learning about the various tax-saving opportunities available. This article will present how to save tax apart from 80C and home loans and list available options to save taxes beyond Section 80C.

Tax Savings with NPS: Sections 80CCD(1B) and 80CCD(1)

The National Pension System (NPS) subscription can claim up to Rs 1.5 lakh in annual tax savings under Section 80C. The additional NPS payments grant further eligibility to deduct Rs 50,000 under Section 80CCD (1B). This can reduce the tax by Rs 15,600 if you fall in the 30% tax group, including the 4% education cess.

Tax Savings on Health Insurance Premiums: Section 80D

Tax incentives are available under Section 80D to encourage self-financed health insurance. This section lets you claim health insurance premiums and tax deductions for healthcare expenses. Check your policy to see if it qualifies for this deduction.

The deduction limits under Section 80D differ based on who is covered and their age. Relying on your family status, you can claim ₹25,000, ₹50,000, ₹75,000, or ₹1 lakh. For instance, if the policy covers your close family, you can claim up to ₹25,000. You can receive up to ₹50,000 if it covers someone over 60 years. In addition to your family insurance limit, you can claim ₹25,000 for non-senior citizens and ₹50,000 for senior citizens if you have a policy for your parents.

Tax Savings on Repayment of Education Loan: Section 80E

Several students take loans for higher education. Section 80E’s tax benefit depends on the interest you pay for these education loans. Parents or students can receive this benefit based on who is responsible for borrowing and repaying.

However, this deduction is available exclusively for loans taken from financial institutions, not from family or friends. It is available from the beginning of the year that the payback is completed, the interest for the next seven years, or until the interest is paid fully, whichever comes first. There is a limit to the amount you can deduct for the interest repayment.

Tax Savings on Home Loan Interest: Section 24

Householders with a home loan can get a tax deduction under Section 24 for the interest paid. For a self-seeking property, the maximum deduction is ₹ two lakhs.

The deduction for rented property or property considered rented is unlimited, and you can claim the entire interest amount.

However, if you can’t live in the property because of your job or business and must stay elsewhere, the deduction limit remains ₹2 lakhs.

Tax Savings on Interest Repayment for First-Time Homeowners: Section 80EE

For the first time, householders can claim a tax deduction under Section 80EE for up to ₹50,000. This supplements the ₹2 lakh limit under Section 24 for home loan interest.

To be entitled, the house’s worth must be less than ₹50 lakh, and the loan amount must be ₹35 lakh or less. This deduction, which had a ₹50,000 yearly cap, was first implemented in 2013–14 and lasted for two years. It was reinstated in 2016–17 and will continue until the loan is paid back.

Tax Savings on Rent Paid without HRA: Section 80GG

For salaried individuals, 80GG is a tax-saving option in addition to Section 80C. If you don’t obtain HRA due to working in the unofficial sector or are self-employed, claim a deduction for rent paid, up to ₹60,000 per year.

This deduction isn’t obtainable if a person owns a house and lives in a rented house in the same city or if a person owns a house in another city and claims a deduction under Section 24 for home loan interest on that house.

1. 25% of the total worth (excluding capital gains).
2. Actual rent paid minus 10% of your income.
3. ₹60,000

Tax Savings on Savings Bank Interest: Sections 80TTA and 80TTTB

Everyone keeps money in banks and earns interest on it. Everybody, including HUFs, can claim a tax deduction on this interest. Other than senior citizens can claim deductions under Section 80TTA, senior citizens can claim under Section 80TTB. However, deductions cannot be claimed on interest from FDs, RDs, or Term Deposits.
Section 80TTA:

1. The maximum limit of deduction is ₹10,000.
2. Anyone can claim a deduction on interest earned up to ₹10,000 from all savings accounts combined.
3. Any extra interest will be deemed income from other sources and is taxable.
Section 80TTB:
4. Initiated on April 1, 2018, for senior citizens.
5. The tax rebate limit for elderly persons is up to Rs 50,000 for interest-earning deposits and savings accounts.

Tax savings on the treatment for specified diseases: Section 80DDB:

A person who has diseases like cancer, neurological diseases (dementia, motor neuron diseases, Parkinson’s), AIDS, or others that need high-priced treatment can get a tax deduction under Section 80DDB.

Section 80DDB enables individuals or HUFs to claim a deduction for medical assistance for a condition related to a particular disease. The deduction is up to ₹40,000 or the actual amount paid, whichever is lower. For senior citizens or their dependents, this limit increases to ₹1 lakh.

Conclusion

Taxpayers must put their financial well-being first and research tax-saving ideas other than Section 80C. For example, there are better ideas than taking out a home loan to save money on taxes. If, on the other hand, you genuinely need a house and intend to take out a loan, think about utilizing tax advantages to make the repayments more manageable.

Use tax deductions to lower your income tax liability without compromising your financial security.

Study to discover simple product purchases and customized tax-saving options. This will ensure that you make the most of your selections.