15 Tax Saving Options Other Than Section 80C

The government provides several tax deduction benefits for Long Term Capital Gains in India under Section 54, Section 54EC, Section 54F, and so on. To get in-detailed information on these Sections, click here.

Tax department allows taxpayers to reduce taxable income by making certain investments or eligible expenditures under Chapter VI A.

Section 80C allows deductions for investment made in PPF, EPF, life insurance premiums, Equity-linked Saving Schemes, stamp duty and registration charges for real estate purchases, Sukanya Smriddhi Yojana (SSY), National Saving Certificate (NSC), Senior Citizen Savings Schemes (SCSS), ULIPs, tax saving FDs for five years, infrastructure bonds, etc.

Calculating your income tax liability is easy. Just follow the simple formula:

Sum of all Your Earnings = Total Gross Income – Deductions = Taxable Income

Click here, for a brief guide to help you calculate your taxable income.

A new income tax e-filing portal was launched by the Central Board of Direct Taxes (CBDT) on 7th June 2021. In place of incometaxindiaefiling.gov.in, the new income tax portal link is www.incometaxindiaefiling.gov.in. Users will need to use the new site to file their income tax returns and complete other tax-related tasks.

It may be necessary for a taxpayer to file an income tax return to report his income, to carry forward losses, or to claim a tax refund. Note it is important to keep all the documents required for calculation and reporting data handy. Click here for a step-by-step guide on how to file an ITR .

You will need the following documents when filing your Income Tax Returns:

• KYC documents
• Salary slips
• Investment proof in tax-saving instruments
• Certificates of interest from banks/post offices
• All related proof to make claims under the various sections
• Form 16
• Form 26AS

The Income tax department with a view to encourage savings and investments amongst the taxpayers have provided various deductions from the taxable income under chapter VI A Each of these are for a different tax deduction to help you save tax. For example:

• Section 80C helps save up to ₹1, 50,000 on investments like Life insurance, ELSS, PPF, etc.
• An additional deduction for investment up to ₹ 50,000 in NPS is available under subsection Section 80CCD (1B).
• Section 80D allows tax deduction on premiums paid for health insurance
• Section 80G allows tax deduction on donations to charitable institutes and trusts.

Section 80E allows tax deduction on the interest paid against the education loan.

The following tax deductions can be claimed by Individuals and HUF under Section 80D:

1. Health insurance premium paid for self, spouse, dependent children, and parents.
2. Preventive health check-ups.
3.  The limit of the deduction varies with age.

For the health insurance premiums paid by Individuals and/or HUFs, the following are tax deduction limits for the year under Section 80D:

Yes, under Section 80D tax benefits can be availed on premiums paid towards critical illness insurance plan(s).

If you are paying the premium for critical illness insurance plan or any other health insurance plan, you can claim deductions based on your age.

Those below 60 years of age can avail tax deduction up to ₹ 25,000 annually for self, spouse and children. Those above 60 years of age are allowed a maximum of ₹ 50,000 towards the maintenance of health insurance policy or medical treatment. 

You are eligible to claim deduction on premiums paid for your parents. For parents below the age of 60, the threshold is ₹ 25,000. For parents above the age of 60, the threshold is ₹ 75,000. Therefore, if you are paying premiums for self/spouse/children and parents above the age of 60, you can claim a deduction of up to ₹ 75,000. 

If you are above the age of 60 and are also paying the premiums of parents (by default above the age of 60), then you are eligible for a maximum of ₹ 1 lakh as a deduction under Section 80D.

Yes, there are tax benefits for cancer insurance. There is no separate Section under the Income Tax Act for cancer insurance. However, you can claim it under Section 80D under premiums paid towards health insurance policy.

Yes.

Under Section 80D, you are allowed to claim a tax deduction of up to ₹ 25,000 per financial year on health insurance premiums. This limit applies to the premium paid towards health insurance purchased for you, your spouse, and your dependent children.

You can avail tax deduction under Section 80D for health insurance premiums paid up to ₹ 1, 00,000 – only if both you and your parents are senior citizen.

Note that payment of health checkups of up to ₹ 5,000 are also covered under Section 80D.

Yes, you can avail tax benefits on parents' medical expenses under Section 80D of the Income Tax Act – according to your age either of ₹ 25,000 (below 60 years of age) or ₹ 50,000 (on or above 60 years of age) on your health insurance premiums.

Section 80DDB allows tax deductions for treatment of specified diseases. It can be claimed by

• Individuals
• their dependents, or
• HUFs.

Medical treatment from Neurologist, Oncologist, Urologist, Hematologists, Immunologist or any such specialist, as may be prescribed.

Tax deduction allowed under Section 80DDB depends on two factors - the age of the patient and the actual amount of expenditure.

The amount can be claimed lower of the following:

• The actual amount being paid for the treatment
• or the sum of Rs. 40,000 /– (in case the patient is Normal citizen)
• or the sum of Rs. 1,00,000/- (aged 60 years or more)

Other Conditions:

• The deductions are always claimed with respect to the actual expenses incurred during the relevant financial year.
• In the case when the dependent is already insured by any insurer or company and some payment is received either from the insurer or by way of reimbursement from his employer- the insurance amount must be subtracted from the deduction allowable. For example, if you are eligible for ₹ 1, 00,000 and you received ₹ 40,000 from the insurance company then you are eligible for ₹ 60,000 deduction under this section.

Under Section 80DDB, the following diseases or ailments are eligible for tax deduction:

1. Neurological Diseases where the disability level has been certified to be of 40% and above,—
   • Dementia ;
   • Dystonia Musculorum Deformans ;
   • Motor Neuron Disease ;
   • Ataxia ;
   • Chorea ;
   • Hemiballismus ;
   • Aphasia ;
   • Parkinsons Disease ;
2. Malignant Cancers ;
3. Full Blown Acquired Immuno-Deficiency Syndrome (AIDS) ;
4. Chronic Renal failure ;
5. Hematological disorders :
   • Hemophilia ;
   • Thalassaemia.

You can claim the deduction under Section 80DDB at the time of filing ITR.

• There should be proof that the medical treatment is actually being undertaken and the prescription from the doctor stating the person is suffering from any disease specified under Section 80DDB.
• For the same, the prescription given by the specialist doctor is among the most important documents.
• Where the treatment has been received in a government hospital then the prescription may be issued by any specialist working full-time in that hospital and having a PG degree in General or Internal Medicine or equally recognized degree.
• In the case of a government hospital, a prescription should also contain name and address of the government hospital.

While it is a must that the prescription from the qualified specialists of the relevant field, the content of the prescriptions should strictly follow the assigned format. Earlier, Form 10-I was required for the same but that has been turned down. In the present case, the following parameters are a must and should be specified in the prescription.

• Name of the Patient
• Age of the Patient
• Name of Disease or Ailment
• The specialist doctor issuing the prescription must specify his/her name, address, qualification and registration number.
• In the case that the treatment is being undertaken in a government hospital, the name and address of the government hospital must be mentioned.
• The form must be signed by the head doctor in the hospital as per the case.

This prescription form is submitted to the income tax department while filing the income tax return. Practically no document is attached with ITR, it is advised to keep a copy of the prescription for future reference.

This applies to individuals buying a home. You can claim for deduction on interest payment of up to ₹1,50,000 per annum on your housing loan under Section 80EEA, provided you don't own any other , and subject to conditions prescribed. This deduction is over and above the deduction of ₹2,00,000 per annum for interest amount payments which is available under Section 24 of the Income Tax Act.

Section 80G of the income tax provides an income tax deduction to the tax-payers on donations made to charitable institutions and specified trusts / certain funds, etc. This deduction is available to all types of persons (individual, HUF, Company etc)

As per Section 80G, you can claim deductions under two broad categories:

• Donations without an upper limit: 50% or 100% of the total contribution made can be deducted, according to the charitable institution where donation is made, without any other limitation.
• Donations with an upper limit: 50% or 100% of the total contribution can be tax-deductible, in accordance with the charitable organization where the money is donated to. You should note that the amount deducted in this type is limited only to 10% of your gross total income

Mode of payment of donations to avail tax deduction under Section 80G

For amounts up to ₹ 2,000 you can make donations in cash. However for an amount greater than the same, the contribution must be made in the form of cheque, digital payment or demand draft to claim tax benefit.

Documents are required to claim tax deduction under Section 80G

• Receipt of donation - The receipt should provide details like Name, Address, PAN, registration number of the trust & the name of the donor as well as the amount of donation
• 80G Certificate of Trust - You should keep a photocopy of trust’s 80G registration certificate.

If donation falls under 100% deduction category, then Form 58 is a mandatory. The donor should also insist on Form 58 from trust.

A taxpayer can claim the least of the three below as tax deduction under 80GG:

• Total rent paid minus 10% of adjusted total Income.
• A flat amount of ₹ 60,000 per year or ₹ 5,000 per month

25% of Adjusted total Income ( i.e., Total Income excluding long-term capital gains, short-term capital gains under section 111A and Income under Sections 115A or 115D and deductions under Sections 80C to 80U. Also, income is before making a deduction under section 80GG).

Tax benefit under Section 80GG is available to individuals who do not receive House Rent Allowance (HRA) but is paying rent for his/her own stay. To avail this benefit you need to file a declaration with Form 10BA for the rent paid to owner of the house in a financial year by filling up the form and attach the required documents. Maximum amount of deduction that can be claimed under Section 80GG is ₹ 60,000.

Section 80GGC- it specifies the deduction under the Income Tax Act which is allowed from the total gross income of specified assesses* for the contributions made to a political party** or an electoral trust.

Section 80GGB- any Indian company or enterprise that donates to a political party or an electoral trust registered in India can claim a deduction for the amount contributed.

*specified assesses means- any person(an individual, a Hindu Undivided Family (HUF), a firm, an AOP or BOI and an Artificial Juridical Person) except any local authority or artificial juridical persons who are wholly or partly funded by the government

** The political party receiving the donation must be registered under the Section 29A of the Representation of the People Act, 1951. An electoral trust is a non-profit company created under Section 8 of the Companies Act, 2013

Both individuals and companies can claim deduction on 100% of the amount donated by them to a political party under Section 80GGC and 80GGB respectively.

Section 80TTA - Generally, the interest earned from the amount deposited in a savings account is taxable. But, you can claim a tax deduction under Section 80 TTA for up to a maximum amount of ₹10,000 earned as interest on savings bank account or post office for a given year.

Section 80TTB - The right to resident senior citizens (age should be 60 years or above) to claim a larger deduction of ₹ 50,000 on the interest income earned on deposits. Interest income includes Interest on bank deposits; either savings, recurring or fixed deposits, deposits at the post office, on the deposits held in co-operative society mainly engaged in the business of banking.

Any resident who has been certified by a medical authority as a person with a disability 0f 40% or more can claim tax benefits under Section 80U. The following disabilities are included:

1. Locomotor Disability
2. Mental illness
3. Leprosy
4. Blindness
5. Hearing impairment

The Section also includes severe disability which is considered when a person is suffering from 80% /more or multiple disabilities.

The limit for claiming deduction is as follows:

1. Those suffering from at least 40% of disability are eligible to claim a tax deduction of ₹ 75,000.
2. Those suffering from at least 80 % of a disability or multiple disabilities are eligible to claim a tax deduction of ₹ 1, 25,000.

If your job requires you to shift to another city, you might be reimbursed for any relocation costs. This reimbursement from you company is termed Relocation Allowance.
This is different from House Rent Allowance (HRA) because it demands larger expenses such as shifting houses, moving goods, finding new schools, etc. There are variations in taxability of different relocation expenses.

1. Government Employees-
   Leave encashment is not taxable.
2. For Private Sector Employees-
   Leave encashment is taxable as “Income from salary”. However, certain tax exemptions are provided under Section 10(10AA).
   The exemption is provided as per the lowest of the below-stated amounts:
   Average salary of the last 10
• The actual amount of leave encashment
• ₹ 3 Lakh
• Unutilized earned leave X Average monthly salary
3. If leaves are encash-ed while still working in the company, then the leave encashment is taxable without any exemptions.

A ‘gift’ denotes any type of an asset or a property that one receives from someone without providing anything as payment or in return. These could be:

• money/cash
• Immovable property, such as a house or commercial space
• Movable property, such as jewellery or a vehicle

Any gift received by a recipient contributes towards their income for the financial year and is subject to gift tax. However, gift tax might be exempted if:

• Aggregate value of the gift is less than Rs. 50,000
• Gifts Received from Relatives.
• On the Occasion of Marriage of the Individual.
• Gift received by means of a will or inheritance or in Contemplation of death of the payer.
• Gift received as a sum or property from a fund, trust, foundation, university, other educational institution subject to some conditions.

If you are an Indian resident, and have a dependent with a disability, you can claim tax deductions under Section 80DD. The disability must be certified by a medical doctor.

In case of

• Normal Disability ( i.e. at least 40%) the deduction allowed from gross total income is Rs. 75,000.
• Severe Disability (i.e. 80% or more) the deduction allowed from gross total income is Rs.1,25,000.

Full deduction can be claimed under Section 80DD even if the actual expenses on the said disabled dependant are less than the mentioned amount.

Mental disability is among the listed disabilities covered under 80DD- for others, you must refer to clause (i) of Section 2 by the 'person with Disabilities Act, 1995.