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Saving tax beyond Section 80C for FY 16-17

Here are a number of ways by which you can save taxes other than the Rs 2 lakh permitted under Section 80C (including additional 50000 under 80CCD (1b) for NPS)

Saving tax beyond Section 80C

Most taxpayers in India must be aware of Section 80C of the Income Tax Act which allows tax benefits of up to Rs 2 lakh. But there are a few other lesser-known sections of the Income Tax Act that can provide additional tax benefits to people. Of course, not all the sections will be applicable to everyone. So, let's take a look at the sections, their eligibilities, and the limits of the available deductions.

Section 24(b): Deduction of interest on housing loan
Under this section, interest on housing loan is eligible for tax deduction. Self occupied property will give you Rs 2 lakh. However, if it is not self occupied, then the full deduction is available. However, it won't be available until the property is fully constructed.

Section 80D: Payment of medical insurance premium
Under this section, premiums paid towards medical insurance qualify for tax deductions. Individuals can claim deduction on premiums paid up to Rs 25000. You can claim additional deductions up to Rs 25,000 under this section if the premiums paid are for a policy for your parents and Rs 30,000 if your parents are senior citizens.

80DD: Expenditure on the health of disabled dependent : Under this section, expenses towards medical treatments incurred on dependent children or spouse or parents can be claimed up to Rs 75,000, which goes up to Rs 125,000 in case of severe disability under this section.

Section 80DDB: Expenditure on a specified disease
Under this section, expenses incurred towards curing specified diseases such as cancer, chronic kidney failure among other listed diseases qualify for deduction up to Rs 40,000, which goes up to Rs 60,000 in case of senior citizens and Rs 80000 if age is 80 or more.

Section 80E: Payment of interest on education loan
Under this section, interest paid on education loan taken for self, spouse or children can be claimed as deduction which is the actual amount as there is no limit. This deduction is available for eight years, starting from the year in which the interest payment began.

Section 80EE: Payment of interest on home loan
This deduction is available to an individual purchasing a house for the first time, the deduction is for the amount paid as interest on loan taken. The maximum deduction that can be claimed under this section is Rs 50000 p.a.
There are many conditions one has to fulfil to avail this deduction:

  • The loan must be taken between 1.4.2016 and 31.3.2017.
  • The loan amount should be below Rs 35 lakh.
  • The value of the house should be below Rs 50 lakh.
  • The said house property should be the only one in the individual's name.

This deduction is over and above the limit under section 24(b) of the Income Tax Act.

Section 80G: Donations made to certain funds, temples
Under this section, donations to funds and charity would be eligible for deduction of the amount donated, but it should not exceed 10 per cent of the adjusted gross total income. Some of these charitable trust/organisation qualify for 50% deduction, some for 80% and few others qualify for 100%, hence that has to be kept in mind.

Section 80GG: Rent paid for accommodation :Under this section, HRA deduction is available for the least of the following:
1. Rs 5000 per month
2. 25% of total income
3. Rent paid less 10% of total income
However, this exemption is not applicable if the HRA is part of your salary package.

Section 80GGA: Donation to specified institutions
Under this section, donation to an institution carrying on scientific research or to a university or college which is approved by the government (under 35(1)(ii), 35(1)(iii), 35CCA, 35CCB) for the time being. However, deductions over and above Rs 10000 can be claimed only if the contribution has been made by any mode other than cash. This deduction is not available to the taxpayer who has income from business or profession.

Section 80GGC: Donations to political party
Under this section, political donations qualify for tax deductions and there is no limit on the sum donated.

Section 80TTA: Interest on savings account Under this section, interest earned upto Rs 10000 can be claimed as deduction.

Section 80U: Under this section if an individual is suffering from disability, she can claim for deduction of Rs 50000 and upto Rs 100000 in case of severe disability. This section is available for the taxpayer and will not be eligible for dependents.

Section Deduction (in Rs)
80D: medical insurance Self: 25000
Parents: 25000 or 30000 (senior citizen parents)
80DD: Expenditure on the health of disabled dependent 75000 (40% disability)
125000 (disability of 80% and more)
80DDB: Expenditure on a specified disease 40000
60000 (age 60-80)
80000 (age 80 & above)
80E: interest on education loan No limit
80EE: Payment of interest on home loan Maximum 50000 per annum
80G: Donations made to certain funds, temples Maximum 10% of the adjusted gross total income
80GG: Rent paid for accommodation Least of the following:
1. 5000 per month
2. 25% of total income
3. Rent paid less 10% of total income
80GGA: Donation to specified institutions Above 10000 per annum
80GGC: Donations to political party No limit
80TTA: Interest on savings account Upto 10000 per annum
80U: On self disability 50000 and upto 100000 in case of severe disability.