Income Tax Saving: There are options other than section 80C to save income tax. Out of which the interest being paid on house rent to health insurance, education loan and home loan is also included.
Income Tax Saving: Apart from section 80C, there are many tax saving options which very few people know about. Under section 80C, a taxpayer can reduce his total taxable income up to a maximum of Rs 1.5 lakh per year. Since there is a limit of Rs 1.5 lakh per year, most of the taxpayers want to reduce their taxes. Today we will give you information about other tax saver sections other than section 80C, which will help you save some extra tax.
NPS Account – 80CCD (1B)
National Pension System or NPS is another tax saver section that allows a deduction of up to Rs 1.5 lakh per year by investing in the scheme. It is a social security scheme of the central government which is open to all private and government employees except the armed forces. In this, taxpayers who are either employed or self-employed are eligible for additional deduction of up to Rs 50,000 available under section 80CCD(1).
Health Insurance Premium – Section 80D
Under Section 80D of the Indian Income Tax Act, it allows tax deduction from the total taxable income for health insurance premium payments as well as expenses incurred for health care. Under this section, you are allowed to claim a tax deduction of up to Rs 25,000 per financial year for yourself, your spouse and your dependent children. Medical insurance premium paid for parents is eligible for an additional deduction of Rs 25,000 if they are senior citizens.
Paying Rent – 80 CG
Salaried employees living in a rented house can reduce their tax amount with the help of House Rent Allowance (HRA). Under section 80GG, a taxpayer can claim tax deduction on the rent paid for his residence. The salary component received as HRA is deducted from the taxable salary income under the Income Tax Act. However, HRA is fully taxed if the employee does not live in a rented house.
Repayment of Education Loan – 80 e
Tax benefit on interest paid on educational loan for higher studies is eligible for income tax deduction. Students who have taken college loan are eligible for tax exemption on the interest portion of the loan under section 80E. This benefit is available to the parent or child (student), whoever is repaying the education loan.
Home Loan Interest Payment – Section 24
The principal portion of the in-home loan EMI paid during the year is deductible up to Rs 1.5 lakh under section 80C, while the interest paid is deductible up to Rs 2 lakh under section 24. Taxpayers with a home loan can claim tax deduction under section 24 on the interest portion of their home loan. Tax benefit can be availed only if the residence is occupied within 5 years after the loan expiry date.
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