Never miss a great news story!
Get instant notifications from Economic Times
AllowNot now

You can switch off notifications anytime using browser settings.
Stock Analysis, IPO, Mutual Funds, Bonds & More

Quick tax-saving tips

Here are tax breaks you can claim on various incomes and expenditures under different sections of the Income-tax Act, 1961 that can reduce your tax outgo.

, ET Online|
Updated: Mar 29, 2018, 03.45 PM IST
Watch: Quick tips to save tax
Watch: Quick tips to save tax
It is never too late to get your tax plan in order. You might think that since there are just a couple of days left to the end of the financial year, you won't be able to do anything to reduce your tax outgo for this financial year. But you are wrong.

Here are tax breaks you can claim on various incomes and expenditures under different sections of the Income-tax Act, 1961 that can decrease the amount of tax you pay. If don’t manage to use them for this year, at least you can make a note of them to plan your taxes for the next fiscal.

Section 80C
Section 80C offers individuals to save tax maximum up to Rs 1.5 lakhs. There are various investment avenues and expenditures that one can use to save tax. Commonly used tax-saving avenues are: Public Provident Fund, Equity linked Mutual funds, Repayment of Housing loans, Tuition fees of children etc.

Section 80CCD
Investing in NPS can help you save additional tax of Rs 50,000. This tax benefit is over and above the section 80C benefit of Rs 1.5 lakh, if the limit is exhausted.

Section 80D
Premium paid for health insurance of self, spouse and children offers deduction under section 80D up to Rs 25,000 of the Income Tax act. In addition to that, premium paid for the health insurance of parents can offer additional tax break of R 25,000. If your parents are senior citizens (age 60 years and above), then this tax benefit would go up to Rs 30,000. Therefore, health insurance premium paid for self and senior citizen parents can help you save tax up to Rs 55,000 in a financial year.

Section 80DD and Section 80DDB
Apart from section 80D, there are other two sections that can help you save tax in case of medical expenses incurred for disabled and/or specified persons. Section 80DD offers tax break on the medical expenses incurred on a dependent disabled person. Dependent here includes spouse, children, parents, brother and sisters of the individual.

Deduction allowed depends whether the dependent is disabled or severely disabled. If the dependent is at least 40 percent disabled, then maximum deduction can be claimed for Rs 75,000. On the other hand, if the disability is 80 percent or more then it is considered as severe disability and maximum deduction can be claimed for Rs 1,25,000.

Section 80DDB offers deduction for the medical expenses incurred for the treatment of specified illness such as cancers, chronic kidney diseases etc. This deduction can be claimed for the expenses incurred on self or the dependent. For individuals below 60 years of age, whether self or dependent, the maximum deduction allowed is of Rs 40,000. For senior citizens, age more than 60 years but less than 80, the maximum deduction can be claimed for Rs 60,000. For super senior citizens, the maximum deduction allowed is of Rs 80,000. The list of diseases for deduction are specified under the act.

Section 80U
If you are an individual with disability of 40 percent and above, then you can claim the tax break under section 80U. However, deductions under section 80U and section 80DD cannot be claimed simultaneously. The deduction amount is same as mentioned for section 80DD.

Section 24
Apart from the tax benefit available on the home loan principal repayment under section 80C, one can also claim tax benefit of up to Rs 2 lakh on the interest paid on the loan during a financial year. This benefit is available only for the self-occupied property. If you are paying interest on home loan for an under-construction property, this benefit will be available after the possession of the house, provided it happens within five years. The interest paid during the construction period will be accumulated and will be claimed after getting procession in five equal instalments.

Section 80EE
If you have taken a home loan to buy a house during the financial year 2016-17, then you can claim additional tax break on the interest paid over and above section 24. The maximum deduction allowed under this is of Rs 50,000. However, there are certain condition that you must satisfy before claiming benefit under this section.

Section 80G
Contributing to charity can also help you to save tax. There are certain government notified funds under section 80G that can help you save tax up to 100 percent of the donated amount.

Section 80TTA
Interest earned from the savings account held with either bank or post office is taxable under “Income from other sources”. However, if the interest earned in a financial year is not more than Rs 10,000 then one can claim this deduction under section 80TTA.

Section 80E
Interest paid on education loan will also get you a tax break. Only individuals can claim this deduction. HUFs are not entitled for this deduction. There is no limit on the maximum amount that one can avail in a financial year. However, the benefit is available for maximum up to 8 years from the date of the start of loan repayment.

Add Your Comments
Commenting feature is disabled in your country/region.
Download The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.

Other useful Links

Follow us on

Download et app

Copyright © 2019 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service