Future Generali

Tax saving beyond 80C - what are the options?

While considering an investment, it is important to not just look at returns, but also to look at post-tax returns. Investments covered under Section 80C of the Income Tax Act, 1961 are popular owing to the enormous potential they offer for tax savings, but several other sections enable tax savings as well. Here are some options apart from Section 80C:

  • Section 80D: Section 80D allows for tax exemptions on payment of premium towards medical insurance. These include premiums paid for insurance for your spouse, dependent parents as well as children. The maximum amount deductible for an individual is ₹25,000 to cover the premium of self, spouse and dependent children. An additional deduction of ₹25,000 is available for premium paid for parents. If the parents are senior citizens, the deduction amount available is ₹50,000 for their premiums.

  • Section 80DD: Section 80DD offers tax relief to individuals who incur expenses owing to taking care of disabled persons including dependent children, siblings and parents. Up to ₹75,000 per annum is allowed for claims under this Section, which can be hiked to ₹1.25 lakh if the disability is severe.

  • Section 80DDB: Treatment of certain specified diseases also allow taxpayers to apply for tax benefits. These diseases include cancer, AIDS, and neurological diseases, among others. The deduction is available on the amount spent on treatment or ₹40,000, whichever of the two is lesser. However, this deduction is only applicable when the taxpayer is paying for treatment of spouse, children, siblings or parents who are dependent on them. If the person for whom the expense is made is above the age of 60, the tax deduction limit is ₹1,00,000.

  • Section 80E: Under Section 80E of the Income Tax Act, tax benefits are available on the interest being repaid towards an education loan. The loan must be from a recognised bank or financial company or a charitable institution and must have been taken to undertake a course as specified in government guidelines. There is no limit for the amount that is claimed as a deduction on the interest paid on the education loan in a single financial year.

  • Section 80EE: This tax deduction is available to individuals who are repaying home loans, and is capped at ₹50,000 in every financial year. However, this section restricts tax benefits to loan amounts that are below ₹35,000 and for a house whose value is under ₹50,000.

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