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Section 80C is a primary choice for Tax Saving for most taxpayers as it allows deductions up to Rs 1.5 lakhs per annum. For instance, if your taxable income is Rs 1 lakh and you invest the same amount in a scheme covered under Section 80C, you will be paying zero additional taxes that year excluding any kind of education cess or capital gains.
Despite its massive popularity, Section 80C has its share of limitations. We would be discussing the other tax saving options beyond Section 80C in this article. So let’s go ahead and begin our journey
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All Equity Linked Saving Scheme (ELSS) schemes for instance, that most taxpayers without any second thought promise to take does not perform equally. Some provide great returns while some clearly do not.
Moreover, they come with a mandatory lock-in period of 3 years, which might not be favorable for everyone.
On top of it, it’s never a great idea to put all your eggs in one basket, is it?
Before you plan your taxes, you should be aware of the total income and tax liability in order to be a smart tax saver. Moreover, the government has these days provided with many plans in which individuals can make better investment decision along with tax saving options. But Individuals with less or no knowledge often get stuck with 80C tax benefits only during tax planning. While there is little doubt 80C investments are best for tax saving purposes, however, there are other deductions as well that you can claim.
If you are one of the millions of taxpayers in the country who is about to take a hasty investment decision, stop right there!
Don’t you miss out on the following deductions as you consider them while filing your income tax return?
Also, Read: Salaried? You need to file Income Tax Return!.
Now since you get little aware of the tax saving options, it is better to have a full view on the above 12 tax-saving deductions as per Income Tax Act, 1961 for better understanding:
Also, Read: Best Tax Saving Options Beyond Section 80C.
Section 80EE provides first-time homebuyers deductions on the interest paid on their Home Loan. However, the maximum deduction that you can claim under this section is Rs 50,000 per annum. But in order to claim deductions under this, you need to comply with the following conditions:
If you do not receive HRA (House Rent Allowance) as part of your salary or if you are not a salaried employee, you can claim deductions for the rent paid for accommodation u/s 80GG.
The deduction amount will be the lower of one of the following:
Note: The above interest amount up to Rs. 10,000 is not any exempted income. In fact, you should show this amount as “Income from other sources” in your Income Tax Return and must then claim deduction under this section.
Moreover, any amount of interest earned on the FDs (Fixed Deposits) is completely taxable and you cannot claim any deduction on that as there is no deduction.
We would advise you to consider the above Tax Saving Tools beyond the standard Section 80C.
There is no doubt that Section 80C is one of the most popular Tax Saving options. However, there are several sections apart from 80C that can help an individual benefit from tax exemptions. Besides, It is time you start looking beyond 80C for tax savings.
Also, Read: Calculate Your Tax – Income Tax Calculator.
Mr. Neelansh Gupta is a Legal Counsel having extensive in-depth knowledge of various laws. He has completed his graduation in law and has experience in IPR, Taxation and Corporate laws.
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