Save Taxes beyond Section 80C
There are many ways to save taxes beyond the Rs 1 lakh permitted under Section 80C. Find out how
By Research Desk | Mar 21, 2014
What are the available ways of saving taxes beyond the R1 lakh permitted under Section 80C?
- Deepak Jain
There are a number of ways by which you can save taxes other than the R1 lakh permitted under Section 80C of the income tax. Periodically, the government also comes up with tax saving options for limited period. For instance, the infrastructure bonds offered tax exemption up to R20,000 under Section 80CCF. This exemption was introduced in Budget 2010 and was extended till 2011-12 before it was discontinued. Following are the tax saving options beyond the Section 80C benefits:
Section 80CCG: Under the Rajiv Gandhi Equity Savings Scheme (RGESS), a government of India initiative, you may invest up to R50,000 in a financial year that attracts 50 per cent tax deduction of the invested sum. Investments in this scheme is to encourage retail investors to invest in the equity markets. This scheme is open to all resident Indians having an annual income of up to R12 lakh who have never invested in equity or derivatives through a demat account to be eligible. There is a three year lock-in period in this scheme.
Section 80D: Under this section, premiums paid towards medical insurance qualify for tax deductions. Individuals can claim deduction on premiums paid up to R15000. You can claim additional deductions up to R15,000 under this section if the premiums paid are for a policy for your parents and R20,000 if your parents are senior citizens.
Section 80DD: Under this section, expenses towards medical treatments incurred on dependent children or spouse or parents can be claimed up to R50, 000, which goes up to R75,000 in case of severe disability under this section.
Section 80DDB: Under this section, expenses incurred towards curing specified diseases such as cancer, chronic kidney failure among other listed diseases qualify for deduction up to R40,000, which goes up to R60,000 in case of senior citizens.
Section 80E: 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.
Section 80G: Under this section, donations to funds and charity qualify for deduction up to 10 per cent of your gross total income.
Section 80GG: Under this section, a deduction of up to R24,000 against rent paid for your accommodation during the financial year is allowed. However, this exemption is not applicable if the HRA is part of your salary package.
Section 80GGC: Under this section, political donations qualify for tax deductions and there is no limit on the sum donated.