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Tax Saving Options for Indian Residents

  • Tax Saving Investments Under 80C
  • Tax Saving Investments Other Than 80C
  • Other Tax Saving Investments

Health Insurance

Residents can claim a tax deduction up to Rs. 25,000 per financial year under Section 80D for the medical insurance premiums they pay. However, the medical premium contribution should be made in favour of your spouse, children and yourself.

For the insured who are ageing 60 years or more, the deduction limit is up to Rs. 50, 000. The breakdown of the tax savings for health plans is given below:

Other Tax Saving Investments

In addition to Section 80C, there are several other tax saving investments available under Section 80 of the Income Tax Act 1961. The complete list is given below:

Tax Saving Investments Sections Exemption Limit
Expenses on a handicapped dependent 80DD

For Disability up to 80%, you are entitled to receive an exemption of Rs.75,000 (fixed);

For severe disabilities, you may receive an exemption of Rs.1.25 lakhs (fixed);

Treatment of specified illnesses 80DDB

Age up to 60 years – exemptions up to Rs.40,000

Age 60-80 years – exemptions up to Rs.60,000

Age above 80 years – exemptions up to Rs.80,000

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Section 80C of the Income Tax Act provides provisions for tax deductions to an individual or HUF from the total income. Taxpayers can claim a maximum deduction up to Rs.1.5 lakhs per year. Some of the most popular investments that are eligible under this section are:

  • Equity Linked Saving Scheme
  • Public Provident Funds
  • Employee Provident Fund
  • Tax Saving Fixed Deposits
  • National Savings Certificate
  • Unit Linked Insurance Plans
  • Sukanya Samriddhi Yojana
  • Senior Citizen Savings Scheme
Eligible taxpayers can claim deduction for house rent paid even when HRA is not deducted from their salary. The deduction can be claimed for the rent paid by the taxpayer for his own accommodation in a financial year provided he does not own a residential property. The amount of deduction available will be the lowest of:
  • 25% of total adjusted income*
  • Actual rent less 10% of total adjusted income*
  • Rs.5,000 per month
*Adjusted income = total income less long-term capital gain, short term capital gain under Section 111A and income under Section 115A or 115D and deductions 80C to 80U. Also, income is before deduction made under Section 80GG.
Section 80E of the Income Tax act allows you to claim the interest amount being paid on education loan availed for self, children or spouse or the student for whom the individual is the legal guardian. There is no limit on the amount, but the deductions are valid until 8 years from the year of the first interest paid.