To talk about Section 80C, all income tax saving done through schemes like provident funds, fixed deposits, term deposits, life insurance, mutual funds etc., are allowed to avail up to Rs. 1.5 lakhs tax deduction under Section 80C. While the government does deduct taxes from your permanent income and income from other sources, it also gives the benefit of reducing those taxes by filling a few forms and claim a particular sum on, loans or investments.
We, at Sqrrl, aim at providing the taxpayers the best of knowledge to save tax, beyond Section 80C. For smart savers, there is a whole gamut of tax saving investments other than 80C. With awareness, India can indeed be a tax savers’ paradise. Hence, if you are trying to figure out tax saving options, here’s a list of tax saving investments other than 80C that can help you save big.
Table of Content
- 1 1. Section 80: Investments Other Than 80c
- 2 2. Section 24: Interest on a home loan
- 3 3. Section 54: Long Term Capital Gain
- 4 4. House Rent Allowance (HRA)
- 5 5. National Pension Scheme
1. Section 80: Investments Other Than 80c
a) Section 80D
Section 80D particularly deals with the tax deductions for money spent on the purchase of medical insurance policies. Under this up to Rs 75,000 tax benefit investment is given:
- This includes Rs. 25,000 for self-spouse-children, less than 60 years of age
- Rs. 50,000 for senior citizen parents or self.
It is provided for individual and Hindu Undivided Families (HUF). This includes medical premiums for the individual. It is often purchased self, dependent children, and spouse. The deduction amount is up to Rs. 25,000. Income tax saving for senior citizens whose age lies between 60 years and 80 years, for that amount varies from Rs. 20,000 to Rs. 30,000. Super senior citizens have exemptions up to Rs. 30,000. Read more.
Section 80 DD
It allows us to claim a deduction for resident individuals and HUF.
- Under this section, you can avail income tax saving for various medical treatment expenditures, rehabilitation, and training of disabled dependent. However, it would help if you didn’t claim any deductions under 80U to avail of this exemption.
- Nevertheless, you can also claim for LIC and other insurance schemes paid for the dependent.
- Apart from this, a Fixed Concession of Rs. 75,000 can be claimed for a disability range of 40%-80%. And, also In case of severe disability (>80%) deduction can be claimed up to Rs. 1, 25,000. Read more.
It allows HUF and individuals to claim a deduction for the medical treatment of family and self towards the treatment of disease under rule 11DD.
- Deductions can be claimed up to Rs. 40,000 to Rs. 60,000(for senior citizens) and Rs. 80,000(income tax exemption for super senior citizens). Read more
b) Section 80E
This section applies to interest payment on loan taken for higher studies for self or education of spouse or children. The concession is like the whole amount of interest for max 8 years.
Under this tax saving investments other than 80C, if you have not owned any other house property or are a first-time homebuyer, then you can claim a deduction under Section 80EE. Section 80EE is levied on individual taxpayers for the interest repayment of a loan taken by them to shop for a residential property. The condition required to be fulfilled-
- Additional relief of up to Rs. 50,000.
- The maximum tax deductions permitted is Rs. 30000.
Under this section, if you have taken loan for the purchase of an electric vehicle, then you are allowed to claim a deduction of up to Rs. 1,50,000.
c) Section 80G
Under this section, the exemption can be claimed for any charitable donations made to approved organizations e.g. Central/State Relief Fund.
- Exemption is given on 50% or 100% of the money donated (cash donations don’t apply). The condition for 50% or 100% amount is dependent on several other factors depending on the fulfillment of the condition. Read more.
If you live in a rented house and do not have HRA in your salary, then Section 80GG will come to your rescue.
- Under this section, tax exemption is provided in lower of the following – 25% of the total income, Rs. 5,000 monthly or actual rent minus 10% of the total income.
- For taxpayers who don’t get HRA individual tax exemption is up to Rs. 60,000 once a year.
d) Section 80U
This section applies to a person suffering from mental retardation or physical disability. Disability is decided as per rule 11DD. Under this, a fixed tax deduction up to Rs. 75,000 and Rs. 1,50,000 is provided in case of a severe disability.
e) Section 80TTA:
Section 80TTA is a part of the Income tax of 1961 that allows a deduction of upto Rs. 10,000 on the interest income. This deduction was introduced in the Finance bill of 2013 and is still applicable. Read more
2. Section 24: Interest on a home loan
Well, we all know that in case of a housing loan, Section 80C has already enabled us to claim income tax investment on the principal component of your loan EMI. However, Section 24(b) gives you an option to claim an additional deduction of Rs. 2 lakhs for the interest portion of your home loan.
It is one of the tax saving investments other than 80C that aids to reduce taxable earnings under income from house property. If there is no rental income, you have the option to book a loss under the head Income from house property.
3. Section 54: Long Term Capital Gain
Section 54 of the Income Tax Act provides exemption towards ‘Long Term Capital Gain’ arising on sale of residential property. It is one of the important tax saving investments other than 80C. You can claim the exemption, after re-investing the amount towards purchasing or constructing new residential house property.
Section 54EC allows people to get tax exemption on capital gains, if the long-term capital gains are invested in specified investment instruments within a pre-defined time period. It must be noted that exemptions under Section 54EC are only available on gains from transfer of long-term capital assets which only includes assets held for over 3 years.
4. House Rent Allowance (HRA)
What we all know about HRA is that most companies make HRA a part of the salary. You can claim it if you are living on rent. The maximum amount you can claim is the lowest of the following:
- Your employer gives the actual HRA
- 50% of your salary (metro-residing individual) and 40% of the salary (for non-metro residing individual)
- Actual rent paid minus 10% of annual salary
- Standard deduction of Rs. 40,000
Don’t forget to avail the standard deduction of Rs 40,000, if you are a salaried person. The new Income tax act has provided this Standard Deduction (after it was scrapped in 2005). It not only save taxes but also minimizes paperwork.
If you are filing your income tax returns online, this will be automatically deducted from your taxable income. It is one of the most popular tax saving investments other than 80C.
5. National Pension Scheme
We all know that your NPS contribution is eligible for tax deduction under Section 80C but, we are not aware of its added tax perks. You can claim Rs. 50,000 deductions under Section 80CCD(1B) on NPS. This is over and above the Rs. 1.5 lakhs available under Section 80C. You can choose the asset classes as per your risk tolerance. For instance, if you are a risk seeker, you can choose higher equity and a low debt ratio mix of investments.
In short, do not stop your tax saving investments at Section 80C. There is a slew of possibilities (like the ones mentioned above) for you to explore. After all, a rupee saved is more than a rupee earned.
Hence, if you are planning to save taxes, then go out of the box and explore many investment options and enjoy benefits under the sections mentioned above of IT act apart from section 80C. We, at Sqrrl, provides you to enjoy all the available tax saving schemes under section 80C and also apart from it.