The Buyt Desk
Several deductions are available under different sections of income tax to reduce taxable income. Most people attempt to make the best use of Section 80C limit with investments in several popular schemes like ELSS (equity linked saving scheme), PPF (public provident fund), and NPS (national pension system). But if you want to save tax without any investment then these 5 deductions will be helpful –
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EPF Contribution
You can get deductions for saving tax with EPF (employee’s provident fund) contributions made towards a recognized provident fund. EPF is deducted from monthly salary and shall be allowable as a deduction under section 80C with a total limit of INR 1.5 lakhs.
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Tuition Fees
Payments towards tuition fees of your ward are a comparatively less-known tax-saving option under Section 80C. Any individual taxpayer (salaried as well as non-salaried) can get this tax deduction rather than HUFs. It helps in saving tax towards tuition fees paid on the education of two children.
Under section 80C, tuition fees paid to any reputed college, school, university, or other educational institution located in India, for any two children’s full-time education are eligible for a tax deduction.
A taxpayer is eligible to avail of this tax deduction if a tuition fee is paid for his or her children. The tuition fees would not consist of payment in the form of donation fees, capitation fees, development fees, or payment of the same nature. No deduction will be available for payments made in a foreign educational institute.
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Home Loan Interest
A person who is taking a home loan for purchasing any residential property can get a deduction for repayment of the home loan principal under section 80C and for interest payment done on the loan u/s 24. For a self-occupied residential property, a later deduction would have a maximum limit of INR 2 lakhs yearly.
If a person has purchased a home in the affordable segment, he or she will claim a deduction of INR 1.5 lakhs in FY under section 80EEA. The individual taxpayer will get INR 3.5 lakhs total deductions on the loan’s interest payment for purchasing a reasonable home.
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Preventive Health Check Up
Under section 80D, a taxpayer can get a deduction with respect to preventive health checkup expenses, medical insurance premiums paid, and more medical investments related to conditions. You can get a deduction of up to INR 5,000 for preventive health checkup investments.
Up to INR 25,000 can be claimed for medical insurance premiums paid for dependent kids, parents who are less than 60 years old, spouse, or for self. If the insured is a senior citizen, the limit extends to INR 50,000.
Note that this expense is added to the complete limit, as applicable. All health expenses given above with an exception of preventing health checkups can be incurred by any mode excluding cash. Preventive health checkup expenses can be earned in cash.
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Employer Contribution towards NPS
Another option to avail of deductions under section 80CCD(2) is the employer’s contribution towards National Pension Scheme (NPS). This deduction is along with the deduction under section 80C. However, under this deduction option, the taxpayer, who is a central government employee, will get a maximum of 14 percent of the basic salary and DA.
Deduction under section 80C has an overall limit of INR 1.5 lakhs and 80CCD(1B) has INR 50,000 overall limit. Any other employee will just get 10% of their basic salary, subject to the combined upper limit of INR 7.5 lakhs. Dividends, interest, etc. gained on the higher contribution will also be taxable.
Alongside these deduction options, there are some more ways to claim deductions. For example, up to INR 50,000 standard deduction for salaried employees, a deduction for house rent allowance or rent paid, a deduction of interest income, and a deduction for LTA (leave travel allowance) under section 10(5) of the Income Tax Act.
