Income Tax News: As the financial year draws to a close, many taxpayers scramble to find ways to minimize their tax burden. The Indian Income Tax Act offers a variety of avenues to reduce your taxable income. While Section 80C, with its Rs. 1.5 lakh deduction for investments in PPF, life insurance, and other instruments, is widely known, there’s a treasure trove of untapped tax-saving opportunities waiting to be explored.
Exploring Avenues Beyond Section 80C
Don’t let Section 80C limit your tax-saving strategies. Here’s a glimpse into some other effective tax deductions:
- Health is Wealth: Get tax relief for health insurance premiums and medical expenses. Depending on your age and taxpayer type, the deduction limit can range from Rs. 25,000 to Rs. 1 lakh (Section 80D).
- Boost Your Retirement Savings with NPS: Contributions made towards National Pension Scheme (NPS) qualify for tax deductions under Section 80CCD(1). This offers an additional Rs. 50,000 deduction over and above the Section 80C limit.
- Caring for Loved Ones: If you have a dependent with a disability, you can claim tax deductions for their medical care and rehabilitation (Section 80DD). The deduction amount varies based on the severity of the disability, ranging from Rs. 75,000 to Rs. 1,25,000.
- Medical Expenses for Specific Diseases: Taxpayers incurring medical expenses for themselves or dependents due to specified illnesses can claim deductions under Section 80DDB. The limit is Rs. 40,000, with a potential increase to Rs. 10 lakh for senior citizens.
- Educate Your Way to Tax Savings: The interest paid on education loans qualifies for tax deductions under Section 80E. This benefit extends to loans taken for your own higher education, your spouse’s or child’s education, or even a legal ward’s.
- First-Time Home Buyer Benefit: First-time homebuyers can enjoy additional tax exemptions under Section 80EE, on top of the deduction allowed for home loan interest repayment under Section 24. This section offers a tax benefit of up to Rs. 50,000.
- Give Back and Save on Taxes: Donations made to charitable organizations registered under Section 80G are tax-deductible. There’s no cap on digital donations, but cash contributions have a yearly limit of Rs. 2,000.
- Renters Can Claim Deductions Too: If you don’t own a house in your city of work and don’t receive HRA from your employer, you can claim deductions for rent paid under Section 80GG.
- Support Scientific & Rural Development: Contributions to specific institutions involved in scientific research or rural development initiatives are eligible for tax deductions under Section 80GGA. You can deduct the entire amount donated, or a maximum of Rs. 10,000, whichever is lower.
- Donations to Political Parties: Donations made to registered political parties or electoral trusts in India are also tax-deductible with no upper limit on the deduction amount (Section 80GGC).
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