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    Want to know how much you need to invest to save tax? Use this calculator to find out

    Synopsis

    Depending on the kind savings or expenditures you incur, under sections 80C and 80CCD1b of the Income-Tax Act, you are eligible for certain tax deductions.

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    By Sudhir Kaushik of Taxspanner

    Yet to complete your tax-saving investments? Many taxpayers are not aware of the investments and expenses that are eligible for tax deduction under Sec 80C and Sec 80CCD1b. Use this tax planning calculator to know how much more you need to invest to save tax this year.

    Saving or expense What’s eligible for deduction Example Your figures
    PF and NPS Your contribution to the Provident Fund or the
    NPS as part of the mandatory retirement
    savings are eligible for deduction under Sec 80C.
    Rs 48,000 Note: Don’t include
    the matching
    contribution by
    your employer.
    Voluntary PF Additional voluntary contributions to Provident
    Fund get the same tax benefit.
    NPS Under Sec 80CCD(1b), up to Rs 50,000 put in NPS
    is deductible. This is over and above the Rs 1.5
    lakh deduction under Sec 80C.
    Rs 50,000 Note: This additional
    deduction is
    only for NPS.
    Insurance policies,
    pension plans and
    SIPs in ELSS funds
    Premiums of existing life insurance policies,
    Ulips and pension plans and ongoing SIPs of
    ELSS funds.
    Rs 12,000 Note: Include only if
    payment made
    during 2019-20.
    Tuition fee Tution fee paid for full-time education of up to
    two children. Playschool fees is also eligible
    for deduction.
    Rs 18,000
    Interest on
    NSCs
    Compound interest that accrues on NSCs
    during the year is deemed to be reinvested
    and can be claimed as deduction.
    Rs 780 Note: Use an online
    calculator to
    know interest.
    Home loan
    repayment
    The principal portion of home loan EMIs is
    deductible, including home loan prepayments
    during the financial year.
    Rs 23,000
    Stamp duty and
    registration
    Stamp duty and registration charges for house
    bought during the financial year can be claimed
    as deduction.
    Note: House should be
    in the name of
    taxpayer.
    A. Total Rs 1,51,780
    B. Maximum
    deduction limit
    Rs 1.5 lakh (Sec 80C) + Rs 50,000 (Sec 80CCD1b) = Rs 2,00,000
    C. Balance to be
    invested
    B-A = Rs 48,220 Note: Needs to
    invest Rs 48,220
    more for full
    deduction.

    Also read: Can these deductions make you tax free?
    ( Originally published on Jan 20, 2020 )
    (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
    (Click here to know how to save on taxes for the financial year 2020-21.)

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