Income Tax News: Have you not yet completed your income tax savings? These three months have passed. Investing in them can result in tax deduction savings. There is only until March 31st to take advantage of tax advantages within a fiscal year. January has now officially begun.
Last-Minute Savings for Tax Prevention
Last-minute savings can prevent your taxes from being withheld in such a case. Usually, Section 80C is the first item that springs to mind when discussing income tax savings. With the exception of 80C, there are ten other choices where investing will result in no tax deduction all.
Common Yet Limited in Scope
The most common method of avoiding income tax is 80C, but the majority of savings plans are subject to it, and the exemption only lasts for up to Rs 1.5 lakh. However, there are other ways where investing will result in no deduction of any kind, or if it does, a refund will be issued.
National Pension System
Under Section 80C of the National Pension System (NPS), you can save up to Rs 1.5 lakh in taxes. Additionally, you can save an extra Rs 50,000 under Section 80CCD (1B). This implies that you might save a total of Rs 2 lakh.
Health Insurance (80D)
Section 80D allows you to claim health insurance premiums. The number of beneficiaries and their age under 80D will determine the amount of tax exemption you are eligible for. You are eligible to claim tax savings of up to Rs 25,000, Rs 50,000, and Rs 1 lakh in this manner.
Education Loan (80E)
If you have taken out a loan to pay for your kids’ education, you are eligible to have the repayment of that debt tax sheltered. You can receive tax exemption on the interest component of your Education loan under Section 80E. Depending on who is repaying the loan, either the parents or the child may benefit from this tax exemption. You can claim tax exemption on interest as much as you would like; there is no cap on this.
House Loan (Section 24)
There are two ways to obtain a tax exemption on house loan repayment. Not only is there a Section 80C tax exemption of Rs 1.5 lakh for the principal amount, but there is also a Section 24 tax exemption for the interest component.
If the property is in your name and you live there, you are eligible for a tax exemption under this section up to a maximum of Rs 2 lakh. The amount of tax exemption that you can claim for interest paid during the year is unlimited if you rent the house instead of living there. This means that any interest you pay falls within the tax exemption.
80EE
Those purchasing their first home are eligible for an additional exemption from home loan interest under Section 80EE from the government, provided that they have never owned a property before. You may claim additional tax under this section up to Rs 50,000.
This exception supersedes the exemption granted under Section 24. This implies that first-time homebuyers qualify for an annual rebate on housing loan interest of at least Rs 2.5 lakh. This is contingent upon the property’s price being less than Rs 50 lakh and the loan amount being less than Rs 35 lakh.
HRA (80GG)
Rent is tax-exempt if you are employed and your employer offers HRA. However, you are unable to claim a tax exemption on your housing rent if you do not receive HRA. This is what occurs when you work independently or in the unorganised industry. For these individuals, the government offers section 80GG as an option.
Savings Bank Interest (80TTA)
Additionally, interest earned from savings bank accounts is exempt from taxes. Any individual or HUF is eligible for tax exemption under Section 80TTA up to a maximum of Rs 10,000. Savings accounts from banks, co-ops, or post offices fall under this category. Being a senior citizen is not a requirement for this tax exemption; it is available to everyone. Interest that exceeds Rs 10,000 falls under the other income category and is subject to taxation.
Disability Medical Expenses (80DD)
If you provide care for a disabled person, you may be allowed to claim section 80DD charges. A parent, sibling, child, or other family member could be that impaired individual. The degree of the disabled person’s disability determines the amount of tax exemption you will receive. The amount of tax exemption in this is between Rs 75,000 and Rs 1.25 lakh.
Treatment of specific disease (80DDB)
Certain diseases, such as cancer, neurological disorders, and AIDS, have extraordinarily high treatment costs. Under section 80DDB, the government exempts up to Rs 40,000 in taxes. The tax exemption for senior folks is one lakh rupees.
Donation (80G)
You can also deduct taxes on charitable contributions. Tax exemptions apply to donations made under Section 80G to approved charity organisations. Exemption isn’t offered for the full donation, though.
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