The Tax season is approaching and during this period the people’s attention becomes focused on getting the Section 80C deductions. These deductions are up to a limit of 1.5 Lakhs. Due to this, the general taxpayers overlook many other tax deductions that they are eligible for. These deductions that we are going to discuss in this article will reduce the tax payable and also the investment, one needs to make to avail the benefits under the Section 80C of the income tax. Let’s take a look at some of the deductions that we can have to save income tax.
1) Tax Deductions on the rent paid for the case of Self Employed
Under the 80GG section of the income tax act, 1961, the individual will be responsible for the deductions for the rent paid by him, for his residence. The total amount that can be claimed in this form will be the least of the rent paid minus the 10 % of total income, 25 % of the total income and 5000 INR per month. The individual should not have self occupied accommodation residence, in this case.
2) Deductions related to interest on the loan taken for the higher education
Based on the Section 80E of the Income Tax Act, an individual can claim the interest towards the loan taken for completing higher education of spouse, children or the students, for which he is the legal guardian. This type of deductions can be claimed for a period of eight years, starting from the year of the repayment of the loan.
3) Deductions related to the donations to the charitable institutions
Generally the deductions under the section 80G is not available at the time of providing the investment proof of the employer. Thus the individuals usually miss the deductions which are available for the donations made to various charitable institutions. The rate of such deductions is either 50 % or 100 % of the amount donated, depending on where the funds were donated. These deductions are also subject to the restrictions of 10 % of the gross total income of the individual.
4) Deductions for the person with some disability
Based on the Section 80U, if there is a person who is having some disability, he can claim a deduction of up to 75000 INR. In case the disability or illness is a critical one, a deduction of more than 125000 can be claimed by the person. These deductions can be claimed irrespective of the actual expenditure incurred by the individual.
5) Deductions on the Tuition fees paid for the kids
On the part of parents, paying the tuition fees for the children’s education is a mandatory expense. There are only a few people, who have this information that this expense is also deducted as tax savings. At the time of filing the return, tax deduction benefits can be obtained on the tuition fees paid for, kids in the schools as well as colleges. This is based on the information in section 80C.
6) Deductions on the Expenses Incurred on the Treatment of Special Diseases
There are a lot of diseases like Cancer, Aids, etc., which require a huge amount of money. It puts a heavy burden of the person suffering from such diseases. Keeping this fact in the mind, the Income Tax Department of India has rendered some relief to such individuals. This is mentioned under the Section 80DDB of the I-T act. The normal person can claim a tax deduction of about 40000 INR if he suffering from such critical disease. The deductions are 60000 INR in case of a senior citizen and 80000 INR in the case of the super senior citizen.
7) Deductions applicable on the interest from the Savings account
There are a huge number of taxpayers, who have maintained the savings accounts in different banks. An income is generated in the form of interest on these deposits. It is generally not known to the people that interest up to 10000 can be claimed for the deductions. This information is under the section 80TTA of the Income tax Act.
8) Deduction on the interest paid on the home loan
There is a deduction available of the interest paid for the home loan. This information comes under the Section 24 of the Income Tax Act. But this deduction is also available if the loan is a personal loan and not the home loan. However, this loan should be used to construct as well as purchase the house.
9) Deductions on the interest paid on the loan for reconstruction of the house
Almost all the people are aware of the tax benefits on the purchase as well construction of the new house. However, the loan taken for the reconstruction of the house, also provide the benefits of the tax savings. Under the section 24 B it is given that a tax deduction of maximum 30000 INR on the interest paid for the loan can be availed.
10) Tax Deductions on the reinvesting to Save on the LTCG
There is one more tax deduction option, which is available on the long term capital gains. This comes under the Section 54 as well as Section 54F. There are people who have purchased the house and they can avail the tax deductions on the LTCG, which arise from the sale of capital assets. This will be applicable if such assets are sold within one year of the purchase of the property.
Thus, we have seen some of the uncommon ways in which you can save your tax. These are the options which are not known to the people in general. You can take benefit of the information mentioned in this article and can save tax, if you come under any of the categories mentioned above in the article.