How To Save Tax Other Than 80C?

Section 80C is one of the most well-known tax-saving sections in the Income Tax Act, and it allows numerous deductions. However, you also need to be aware of the alternative sections available to lower your tax liabilities. As a taxpayer, you need to be aware of tax savings schemes other than Section 80C also if your objective is to save tax and positively impact your financial life. You should not make investment only to save taxes but take advantage of tax-saving options as you make your financial decisions, such as buying a medi-claim or getting a loan for higher education/construction of a house or making a generous donation. Therefore, you should use all the available tax-saving opportunities and reduce the burden of your taxes.

Let’s discuss some of the ways how you can save tax through ways other than availing the deduction under 80C of the Income Tax Act, 1961. 

Tax Saving Options Other Than 80C

Section 80C is one of the most well-known tax-saving sections in the Income Tax Act that allows huge deductions. However, you also need to be aware of the alternative sections available to lower your tax liabilities. Here are some essential tax sections that offer you deductions and exemptions: 

1. Section 80CCD

You can save up to Rs.50,000 by investing in the National Pension Scheme (NPS). Whether you are an employee or self-employed, you are eligible for a deduction if you contribute to the NPS. Under Section 80C, you will be able to claim up to Rs.1,50,000 for your contribution and an additional deduction of Rs. 50,000 under Section 80CCD, taking the total to Rs.2,00,000.

You can refer to the NPS Calculator also.

2. Section 80D

The government offers tax incentives on health insurance premiums to encourage people to opt for health insurance. In case you have opted for a Mediclaim policy for yourself and your dependent children and spouse, you can claim a deduction of Rs.25,000 under this section.

If you also opt for insurance for your parents, you can claim a maximum deduction of Rs.50,000 combined. If your parents are above 60 years old and you are below 60, you can claim up to Rs.75,000, and if you and your parents are above 60, then the maximum deduction will shoot up to Rs.1,00,000.

3. Section 80DD

In case you have a dependent family member who is handicapped, you can avail of a tax deduction of up to Rs.75,000 in case of 40% to 80% disability. However, in case of disability above 80%, you can claim up to Rs.1,25,000. The deduction will be available on the basis of the medical expenses/premium paid for an insurance policy to maintain such a dependent family member. This will help in managing medical expenses, rehabilitation, and taking better care of them. For more details refer detailed article  

4. Section 80E

You can claim deductions if you take an educational loan for higher education for yourself or your spouse or children. However, this applies to only the interest amount paid for the loan, and that too for the first eight years of loan repayment. This deduction is also available in case of loans taken for education in foreign.

5. Section 80EE/80EEA

Buying your own home is a dream that every individual wants to fulfil. According to section 80EE/80EEA, you can get a deduction of Rs.50,000 and Rs. 1,50,000, respectively, on interest payments if you are a first-time homebuyer. To get a tax deduction on the interest component of EMI payments under this section, you should not own more than one property. This advantage comes along with the benefits of section 24, which will be described below.

6. Section 80G

Under section 80G, you can save tax by contributing to any registered charitable organisation. In case you donate cash, you get a deduction of Rs.2,000 every year from the taxable income; however, there is no specific limit in case of bank transfer. 

7. Section 80GG

If you do not receive any house rent allowance from your employer, as per section 80GG, you can claim a deduction from your taxable income if you live in a rented house. It can be either Rs.5,000 monthly or 25% of total annual income or actual rent less 10% of annual income, whichever is least. 

8. Section 80TTA

You can also claim a deduction on interest from your savings bank account funds. According to section 80TTA, you can claim up to Rs. 10,000 deductions for interest earned from a savings account. 

However, if you are over 60, you can opt for section 80TTB, which allows you to claim a deduction of Rs. 50,000. This deduction is applicable not only to savings accounts but also to fixed deposits. 

9. Section 10(10D)

As per this section, you can claim a tax rebate when you receive the entire life insurance policy after maturity or due to the insured's untimely death. This is, however, applicable in case the policy was taken after 2012. If not, the premium expense should be less than 20% of the total sum insured for section 10(10D) benefits. However, there are some recent major amendments that should be carefully considered.

10. Section 24

If you take a home loan, you can claim a tax deduction for the interest on such home loan. If the loan is availed for a self-occupied property, you can claim up to Rs. 2,00,000. If the property is rented or not self-occupied, there is no upper for the deduction that you can claim on repayment of interest.

Final Word

The list of ways to save taxes other than 80C does not end here. There are multiple types of investments that you can make to improve your overall financial standing and pay fewer taxes. Now that you know the different ways to save taxes, it is time to decide on the best tax-saving options for you and your family.

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