The most commonly used Sections for tax-saving under the Income Tax Act are Section 80C and Section 80D. Popular instruments like EPF, ELSS, ULIP, NPS, etc. are deductible under Section 80C. However, Section 80C has a cap of only Rs.1.5 lakh for deductions. Section 80D, on the other hand, provides a deduction on insurance policies up to a certain limit. For further tax saving options, taxpayers can take note of some other sections.
These tax-saving sections are:
Section 80DD
This tax-saving option is available primarily to families of handicapped persons. It is applicable to individuals and Hindu Undivided Families (HUFs) on the amount spent on rehabilitation of handicapped dependent relatives.
The deduction will be applicable on:
- Medical expenses including nursing, training and rehabilitation of dependent handicapped relative
- Amount paid to a specified scheme towards caretaking of dependent handicapped relative
To save tax under this particular section, there are specific deduction limits as well. They are as follows.
- Rs.75,000 for 40%-80% disability
- Rs.1,25,000 for disability that is severe (80% or more)
Further, a disability certificate from the concerned medical authority will be required for claiming this tax deduction.
Section 80DDB
Another tax-saving section, 80DDB, allows for a deduction on medical expenditure for self or for a dependent relative.
- Individuals or HUF members above 60 years of age can claim a deduction of up to Rs. 40,000 on treatment expenses for specific medical conditions
- The deduction limit is Rs.1 lakh for expenses incurred on treatment for a senior citizen.
- Medical expenses claimed from an insurance policy or from an employer are reduced before the application of deductions.
- Prescription from a medical specialist is necessary for making this claim.
Section 80 TTA
Deduction upto Rs.10,000 can be claimed on interest earned from a savings account maintained with a bank, co-operative society, or post office.
Section 80GG
An individual who does not receive House Rent Allowance from their employer can claim a deduction on their house rent under certain conditions.
The maximum deduction that can be claimed will be the lesser of
- Rent minus 10% of adjusted gross total income
- Rs.5000/month
- 25% of adjusted total income
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Section 80E
One can also save tax on higher education loans for self, spouse, children, or legal wards. The deduction can be claimed till either:
- 8 years from the year of beginning of loan repayment
- Until the entire interest is paid off
Section 80EE
First-time home owners can save tax apart from 80C under Section 80EE on home loan interest. A maximum deduction of Rs.50,000 can be claimed.
Section 80CCG
A resident individual with a gross total income less than Rs.12 lakh can claim a deduction on 50% of investment in shares of the RGESS (Rajiv Gandhi Equity Savings Scheme), or Rs.25,000 for 3 successive Assessment Years. The conditions for deduction are:
- You are a new retail investor as per the notified scheme requirements.
- The investment is listed as per notified scheme requirements.
- The investment should be made in a scheme with a maximum lock-in period of 3 years from the date of acquisition as per notified scheme.
New investors should note that this scheme is in the process of being phased out.
Section 80U
Resident individuals who suffer from physical disabilities can claim a deduction of upto Rs.75,000, and those with severe disabilities can claim upto Rs.1.25 lakh.
Section 80G
This section offers tax saving options in the form of donations to social causes. These donations are deductible upto 50% or 100%, depending on the charitable institution in question. The list includes Prime Minister’s National Relief Fund, National Children’s Fund, Swachh Bharat Kosh, Jawaharlal Nehru Memorial Fund, and numerous other charities.
Section 80GGB
An Indian company can claim deduction on 100% of contributions made to a political party or electoral trust. Payment should be made in modes other than cash to be eligible for deduction.
Section 80GGC
An individual can claim deduction on contributions made to a political party or electoral trust via any mode other than cash.
Section 80RRB
A resident Indian patentee can claim a deduction of upto Rs.3 lakhs on income earned through royalties for a patent registered on or after 1st April, 2003 under the Patents Act 1970.
Section 80 TTB
A deduction upto Rs.50,000 can be claimed by a senior citizens on interest income from deposits.
Conclusion:
If taxpayers happen to exhaust the Section 80C or Section 80D limit, they still have a number of tax-saving options to choose from. Canara HSBC offers the two-pronged benefits of tax-savings as well as financial security with the Invest 4G ULIP. While one can avail tax deductions and exemptions on the premiums paid, any income earned as well as any maturity benefits, they can also enjoy high returns from investments in any of 7 different funds and 4 different portfolio management strategies.