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Go Beyond 80C Tax Benefits. Turn into a Smart Tax Saver.

Tax Benefits

Section 80C is the most used tax-saving section amongst the tax-payers. Section 80C provides for investment options whenever one wants to reduce his/her tax liability. Be it life insurance premiums, PPF contributions, five-year term deposits or ELSS schemes, the list of tax-free instruments under this section is quite long. But there is a catch. You cannot claim more than ₹1.5 lakhs exemption in aggregate through Section 80C investments. If you add NPS investments (Section 80CCD), you can claim an additional ₹50,000, bringing the total available deduction to ₹2 lakhs. Is the ₹2 lakhs exemption sufficient? What if you can get more?

Tax Expert

Yes, there are other sections which give you additional tax-saving exemptions besides Section 80C. While many are available under Section 80 itself, some belong to other sections.

Let us see what they are –

Section 80

Here is a complete list of tax-free deductions available under Section 80 apart from Section 80C:

SectionsWhat they deal inExemption limit
80D Health insurance premiums Up to ₹60,000
( Premium paid for health insurance for self-spouse-child- ₹25,000
Senior citizen parents or self –₹30,000)
80DD Expenses on a handicapped dependent Disability up to 80% - ₹75,000 (fixed)
Severe disabilities – ₹1.25 lakhs (fixed)
80DDB Treatment of specified illnesses Age up to 60 years – up to ₹40,000
Age 60-80 years – up to ₹60,000
Age above 80 years – up to ₹80,000
80E Education loan interest payment Nil. Actual interest paid
80EE Home loan interest payment for first time home-owners Up to ₹50,000
80G Donations to approved charitable institutes 50% or 100% of the amount donated
80GG Rent paid by employees not having HRA Lower of the following –
· 25% of total income
· ₹5000/month
· Rent paid exceeding 10% of total income
80GGB and 80GGC Contributions made to a political party by companies and individuals respectively Nil. 100% actual contribution made only by other than cash.
80TTA Saving account interest ₹10,000
80U Handicapped tax-payers can claim this deduction ₹75,000 (fixed). For severe disabilities ₹1.25 lakhs (fixed)
80RRB Royalty or patent income Up to ₹3 lakhs

Section 80D

Under this section, the insured can claim a deduction of INR 25,000 on insurance for self, spouse and children. Furthermore, the he can ask for an additional claim of up to INR 25,000 or INR 50,000 for his parents who are less than sixty years of age or greater than sixty years of age respectively.

In case the policy holder and his parents are above sixty years of age, the maximum tax deduction is up to INR 1,00,000.

Section 80DD

It is related to the tax deduction available in the following cases:

  • Expense incurred on medical treatments or rehabilitation of handicapped dependent.
  • Payment made for a specific scheme for welfare of a handicapped dependent relative (fixed deduction of INR 75,000 to INR 1,25,000 depending on the extent of disability)

For claiming this deduction, an individual requires a disability certificate as given by prescribed medical authority.

Section 80DDB

Under this section, a resident individual or a HUF (Hindu Undivided Family) can claim a deduction of INR 40,000 for expenses incurred towards treatment of certain specific ailments for himself or his dependents. In case both the individual or HUF is a senior citizen, they can ask for the deduction of up to INR 1 lakh, which was INR 60,000 and INR 80,000 for senior citizens and super-senior citizens respectively until FY 2017-18.

Section 80E

Under this section, a resident individual or a HUF (Hindu Undivided Family) can claim a deduction of INR 40,000 for expenses incurred towards treatment of certain specific ailments for himself or his dependents. In case both the individual or HUF is a senior citizen, they can ask for the deduction of up to INR 1 lakh, which was INR 60,000 and INR 80,000 for senior citizens and super-senior citizens respectively until FY 2017-18.

Section 80EE

It is for the deduction on home loan interest for the first-time home buyers.

  • For the FY 2017-18 and 2017-16
    To claim the deduction, their property value should not be more than fifty lakhs rupees, while the loan is of less than thirty-five lakhs rupees.
  • For the FY 2013-14 and 2014-15
    In this case, the property value must not exceed forty lakhs rupees while the loan amount is twenty-five lakhs rupees or less.

Section 80G

This deduction is related to the donations paid in support of various social causes. The donations are eligible for tax deduction of up to its fifty or hundred percent. The new rule from FY 2017-18 says that no donation above two thousand rupees should be made in cash mode to be eligible for deduction.

Section 80GG

This is related to the deduction for house rent paid when HRA is not received by the taxpayer. A taxpayer is eligible for this deduction provided he or his spouse does not own a residential accommodation at the place of his employment and must be living on rent.

Section 80 GGB and 80 GGC

An Indian company can ask for a deduction equal to the amount contributed to a political party or electoral trust under Section 80GGB in non-cash mode. Whereas, the section 80GGC defines the same deductions, except the fact that the contribution should be done by an individual taxpayer.

Section 80TTA

It accounts for the deduction of maximum ten thousand rupees against gross total interest earned from the savings accounts with banks and/or post office. It does not consider the interest income from FDs, RDs or corporate bonds.

Section 80U

An individual who suffers from a physical disability, including blindness or mental health problems can ask for a deduction of seventy-five thousand rupees, which can go up to one lakh twenty five thousand in case of severe disability.

Section 24

If you have a home loan, you can earn tax exemption on its interest payment too. Interest of up to ₹2 lakhs is allowed as tax-free expense under the provisions of Section 24(b).

House Rent Allowance (HRA)

If you are a salaried employee then you can enjoy the tax-saving benefits of House Rent Allowance, which might be a component of your salary. If you are living in a rented home you can claim HRA exemption from your salary income. The maximum exemption which is available is lower of the following -

  • Actual amount of HRA received
  • 50% of your salary if you live in a metro city or 40% if you are in a non-metro city
  • Rent paid – 10% of annual salary

Other exemptions from salary income

Besides the all-too-popular HRA exemption, you can also avail tax exemption on Leave Travel Allowance, meal coupons, conveyance allowance, medical allowance, etc.

Gifts, wills and taxation

Money received by way of gift is also tax-free. If you receive gifts from your direct relatives, there is no upper limit on exemption. From non-relatives, however, gifts up to ₹50,000 are tax-free. If you receive cash gifts on the event of marriage, they are completely tax-free without any limit and irrespective of the person giving the gift. Money received through will is also tax-free in your hands.

Do not depend entirely on Section 80C to reduce your tax liability. Though Section 80C does offer a major tax-saving deduction, there are other sections that one can explore. So, use the above-mentioned sections of the Income Tax Act and save your tax outgo.

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