Money
Here are 5 other tax saving options other than 80C
Section 80C is the most used tax-saving section amongst the tax-payers to reduce their tax liability. Starting with PPF contributions, five-year term deposits, life insurance plans or ELSS schemes, though there is a long list of tax-free instruments under this section, in total you cannot claim more than Rs 1.5 lakh exemption through Section 80C investments.
However, various other investment options like NPS investments (Section 80CCD), Rajiv Gandhi Equity Savings Scheme (Section 80CG), Health insurance premiums, Home loan interest payment for first-time home-owners, and education loan interest payment can give you additional tax-saving exemptions besides Section 80C. Experts suggest taxpayers should be aware of their total income and tax liability before planning their taxes.
5 investment options you can go for if you have exhausted the Section 80C limit:
1. National Pension System (NPS)
Under section 80CCD (1B), NPS offers an additional tax deduction for investment up to Rs 50,000. Tax-saving deduction under NPS is over and above the deduction of Rs 150,000 lakh available under Section 80C of the Income Tax Act. Launched by the Government of India, the National Pension System (NPS) allows a subscriber to open an account with Central Recordkeeping Agency (CRA) which will be identified through unique Permanent Retirement Account Number (PRAN).
2. Interest on education loan
Under Section 80E you can avail tax deduction on the interest paid on an education loan. Taxpayers should keep in mind while filing an income tax return, the deduction under this is allowed only on the interest repayment part, not on the principal amount of the education loan. One of the best parts of this is there is no maximum limit on claiming deduction under 80E, which is also over and above the 80C limit.
3. House rent allowance
Under Section 80GG, you can avail tax deduction. However, the amount of deduction is based on the city that you reside in. Hence, you can claim tax deduction under this section if you are staying in a rented apartment, or staying at a house and paying rent.
4. Home Loans
Finance Minister Arun Jaitley in the Union Budget had increased the limit on deduction on home loan interest under Section 24. It was increased from Rs 1.5 lakh to Rs 2 lakh. Hence, starting from the financial year 2016-17, you could claim an additional deduction of Rs 50,000 on home loan interest under section 80EE of the Income Tax Act. The principal amount of the home loan, however, continues to be a part of the overall benefits under Sec 80C which was also hiked from the earlier Rs 1 lakh to Rs 1.5 lakh.
5. Health Insurance
Under Section 80D, you can claim tax benefit if you have taken a health insurance policy. Under this section, you can save tax up to Rs 25,000 and Rs 30,000 in case of senior citizens. Under Section 80D you can also include expenses incurred towards preventive health check-ups.
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