Tax Hacks - Tax Saving Tips

Making India Tax Wise

Tax-smart
Tips

  • 1

    Section 80GG: Rent paid for accommodation - If you do not receive House Rent Allowance (HRA) as part of your salary, or if you are not a salaried employee, only then can you claim this deduction. It is available for the rent paid by the taxpayer for his own accommodation in a financial year as per prescribed Limits.

  • 2

    You can contribute additional amount up to Rs.50,000, to the National Pension Scheme if cash flow permits and claim deduction under Section 80CCD (1B) of the I.T. Act.

  • 3

    The section 80E 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.

  • 4

    Sections 80U allows deduction of Rs.75,000 if you are suffering from a disability (40% disability). In case of severe disability (80% disability), amount of deduction will be Rs.1,25,000. However, the section covers only the taxpayer but not the dependents.

  • 5

    Joint home loan borrowers can claim the maximum tax benefits individually. It means each holder can get a tax rebate of Rs.1.5 lakhs for principal repayment under Sec 80C and Rs.2 lakhs for interest payment under Sec 24.

  • 6

    Keep saving taxes on your post retirement fund by investing into a combination of Tax-saver FD to have liquidity & ELSS to enjoy tax-free higher returns!

  • 7

    HUF is a separate entity and you can claim deductions under various Sections of Income Tax.

  • 8

    Life insurance surrender value is tax-free subject to certain conditions. For ULIPs the tax free redemption period is 5 years while for regular plans the period is 2 years.

  • 9

    Debt mutual funds give you an indexation benefit which reduces your tax outgo if you redeem the funds after 36 months.

  • 10

    Section 80DDB: Expenses on treatments for specified diseases qualify for deduction from Total Income. Maximum amount of deduction is Rs.40,000 for patients below 60 years, Rs.60,000 for senior citizens (Above 60 year of age) and Rs.80,000 for super senior citizens (more than 80 years of age). This exemption can be availed for treatment of self or dependents.

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