July 28, 2022

How Can I Save Tax Beyond Rs 1.5 Lakhs?

  • by Jarrell Marley
  • 20 Days ago
  • Comments Off

Section 80C, one of the most well-liked tax-saving choices, offers investment options for consumers who desire to lower their tax obligation. This section’s list of exempt investments is rather extensive; a few examples include life insurance payments, five-year term deposits, PPF contributions, and ELSS programs.

There is a catch, though.

You are limited to 1,50,000 in total exemption through Section 80C investments. You can deduct an additional 50,000 by including NPS investments (Section 80CCD), bringing your overall deduction to 2 lakhs. The two lakh exemption—is it sufficient?

 Various Tax Saving Investments Other than 80C

 Donations

You might also think about donating to save on taxes. You can contribute to several relief funds, such as the PM Relief Fund, the Funds for Control of Drug Abuse, and the Clean Ganges Fund, or you can give voluntarily to NGOs that have been approved. According to Section 80G of the Income Tax Act, all these donations are exempt from taxation.

Interest on education loans

This benefit is available to you if you have taken out a student loan to pay for your higher education or the education of your spouse or children. You can subtract the interest component of your student loan from your overall taxable income.

The amount of the deduction under section 80E is unlimited. However, from the time you begin repaying the loan, this benefit is only available for 8 years.

Life Insurance Plans

Your life insurance plan may contain further suggestions for tax reduction beyond section 80C. All proceeds from a life insurance plan received upon maturity, surrender, or the policyholder’s death are tax-free under section 10(10D).

This includes the assured amount, any bonuses received, and any returned premiums.

Health Insurance Plans

The Section 80D tax-rebate provision also includes a provision for health checkup costs. You may get a tax exemption on such charges up to 5,000 each.

This exemption includes the Rs 25,000 health insurance rebate. This indicates that those who have claimed Rs 5,000 for medical checkup expenses are qualified for a Rs 20,000 premium charge rebate.

Home Loans

Under this clause, interest payments on a mortgage may be excluded from income tax calculations. Providing the construction is finished within five years of the loan tenure, a maximum of 2 Lakh can be obtained as a tax break on the interest rate if the house is bought for residential use.

There is no tax due on the interest portion of the mortgage if you decide to rent out the property you just bought.

House Rent Allowance

Tax benefits are available under Section 80GG for self-employed and salaried individuals who do not receive HRA as part of their pay but rent housing. Such taxpayers are eligible for a tax deduction on the rent they pay for housing, up to a monthly maximum of Rs 5,000, a yearly cap of 25% of one’s total income, or a maximum of 10% of one’s total revenue, whichever is lower.

Income From Deposits

Deposit interest income is eligible for a deduction from one’s gross total income under Section 80TTB of the Income Tax Act. The annual maximum allowed under section 80 TTB is Rs 50,000. Notably, senior individuals are not eligible for the advantage of section 80TTA, which permits a deduction of the investment earnings from a savings account (up to Rs 10,000).

Final Thoughts

That summarises the main points of tax savings options besides section 80C. Make sure you take advantage of the benefits offered by any of these assets or costs that you already have. Alternatively, if your 80C maximum has been reached, you can invest in many other options to receive further tax benefits.

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