Q. How Can A Salaried Person In A 30% Tax Slab Save Tax After The Section 80C Exhaust? Sakshi Kulshrestha
A. Under Section 80C of the Income Tax Act, a taxpayer can avail tax deduction benefits worth up to Rs.1.5 lakh p.a. You can invest in instruments like PPF, Tax-saving bank FDs, ELSSs, Sukanya Samriddhi Yojana and so on to save on tax under section 80C, but what if the threshold limit of Rs.1.5 lakh has been exhausted?
Here are a few more ways through which you can save on tax:
- Section 80E:If you have an education loan from a qualified financial institution for yourself, your spouse, or your children, the interest amount paid against the loan is fully deductible from your tax liability. The entire interest paid during the relevant financial year is allowed as deduction under Section 80E of the Income Tax Act.
- Section 80CCD:Investing in National Pension Scheme can get you a tax deduction of up to Rs.50,000 under Section 80CCD.
- Section 80D:Purchasing a health insurance policy for yourself, your spouse, or your children can get you a tax deduction of up to Rs.25,000. If you pay the health insurance premiums for your parents as well, you can get an additional tax deduction of Rs.25,000 (For non-senior citizen parents) to Rs.50,000 (For senior citizen parents).
- Section 24:Under this section, if you have taken a home loan, you will be eligible for a tax deduction of up to Rs.2 lakh against the interest paid on the home loan during the relevant financial year.
- Section 80TTA:This section allows you to claim a tax deduction of up to Rs.10,000 on interest income earned from a savings account during the relevant financial year.
These are the most common and effective ways to save on taxes even if you have exhausted the threshold limit of Rs.1.5 lakh under Section 80C.
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