Tax payment is mandatory for all as per the financial rules and regulations set by the government of our nation. However, overloading ourselves with the burden of taxes is never a good idea. There are many approved methods in which you can seek to reduce your taxes by drawing benefits from investments.
One very common means of doing this is to go by tax exemption procedures under Section 80C of Income Tax Act. Nevertheless, apart from Section 80C, there are also a huge number of options from where you can derive tax benefits.
These investments have been certified by the government and are effective tax breakers. In this article, we shall check out those procedures that lie beyond Section 80C.
Given the rising index of treatment costs and the uncertainty of human health, medical insurances have become a dire necessity for most of the people in the contemporary times. This investment can help you in lean times and can enable you to pay for treatment of dear ones without wiping out your net savings. The premium that you pay for this insurance is eligible for tax exemption. The claim can be taken in the name of a person paying the premium or that of his spouse, children or even parents.
Under this section, you can get a tax exemption on a number of minimum Rs. 75,000 per annum which is used for the treatment of disabled people such as the person’s children, wife, spouse, parents, brothers, sisters, and others. If you live in a Hindu Undivided family, then this could apply to any other member of the family.
The amount could be increased from Rs. 75,000 to Rs. 1, 25,000 if the disability happens to be of a serious nature. All you must do is attach a copy of the of the ailment authenticating certificate that is issued by the doctor with a 10-1A form. Cases of cerebral palsy, autism and mental retardation will receive special attention.
As a taxpayer, if you need to make an expenditure for treatment of certain specified diseases such as Aids, neurological disorders, cancer or hematological disorders, then this amount will be considered for a tax exemption. The amount will be as high as 40,000 or less, which has been spent in the process.
This exemption is liable if the treatment concerns parents, spouse, children, brothers or sister. If you live in HUF, then anybody in the family could also do. If the person on whom the expenses are being made is or above the age of 60, then the amount will be rises to Rs. 60,000. Likewise, if the age of the person is above 80, then the amount will come to Rs.80, 000.
The interest of an education loan taken from a financial institution can also be considered for tax exemption. If you take this loan for yourself, children, spouse or even as the legal guardian of any other student, you can claim this exemption. This deduction does not have a limit. However, you must ensure that the loan is for an educational course that is to be pursued post class twelve. This deduction is applicable for eight years.
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Under this section, a taxpayer can get an exemption on the interest that to be paid for a home loan or a loan taken to buy a residential property. The maximum deduction that can be availed is that of Rs.50, 000.
However to avail this tax deduction the loan must be taken between April and March of next year. The loan amount must be less than Rs. 35 lakhs. The total value of the property must be below INR 50 lakhs, and the property must be in the name of a single person or that of the taxpayer.
As per the norms under this section, if you donate to certain government-notified funds, then these amounts would also be pliable for deductions from taxes. However, the amount that you make must not go over ten percent of your total gross income. These donations could be made for the renovation of temples, churches, and mosques that has approval from the central government.
Some other such funds will be that of the national defense fund, Prime Minister’s Drought Relief Fund, Jawaharlal Nehru Memorial Fund, Prime Minister’s national relief Fund, Swachha Bharat Kosh, National children Fund, etc.
You can avail this deduction only if you do not get House Rent Allowance in your salary or if you are not a salaried employee at all. The taxpayer has to provide a 10BA form to avail this benefit and mention the details of rent payment. Other eligibility guidelines are:
- You or your spouse or children cannot own a residential property in the place where you reside.
- If you happen to own a property whose rent acts as an income under relevant sections, you are not eligible for tax benefits under 80GG.
There are other types of investments that could help you to reduce your burden of tax payment, such as donations to institutions, donations to political parties, income from patents, etc. However, to derive benefit from all these exemptions, you must acquire proper knowledge about the eligibility criteria and rules. If you would like to share more tax saving options on how to save Tax other than 80C, then please do so in the comments section below.