The anticipation is high as the country’s budget approaches, with expectations of tax concessions. If such concessions are announced, they could result in tax exemptions for the next financial year.
If you’re aiming to save on taxes for this financial year, time is of the essence. With just two months and a few days left before the end of the financial year, consider exploring options beyond Section 80C for maximum tax savings, potentially up to Rs 4 lakh.
In the new tax regime, there’s a tax exemption of Rs 7 lakh. However, in the old tax regime, Section 80C remains the easiest route, albeit with a limit of Rs 1.5 lakh. Let’s explore some alternative options:
1. Rebate on interest on savings account
Under Section 80TTA of Income Tax, interest received on savings account deposits qualifies for tax exemption. Annual interest up to Rs 10,000 can be claimed. Senior citizens enjoy an exemption of up to Rs 50,000 annually under Section 80TTB on various savings accounts.
2. National Pension Scheme (NPS)
Investing in NPS offers a tax exemption of up to Rs 50,000 under Section 80CCD (1B). This means you can receive a rebate of up to Rs 50,000 if your annual income is taxable.
3. Health Insurance (80D)
Section 80D provides tax exemption on health insurance premiums. Depending on the policyholder’s age, you can claim tax exemption ranging from ₹25,000 to ₹1 lakh. This applies to both self and parents, with each eligible for a Rs 25,000 claim.
4. Home Loan (80EE)
Two types of tax exemptions are available on home loan repayments. Under 80C, there’s an exemption of up to ₹1.5 lakh on the principal amount, while Section 24 provides an exemption on interest up to ₹2 lakh. Additional exemption under Income Tax Section 80EE is offered to first-time homebuyers, with a maximum claim of Rs 50,000, provided the property price is below Rs 50 lakh and the loan is Rs 35 lakh or less.
5. Exemption on donation to charitable institute
Charitable contributions can also yield tax savings. Under Section 80CCC of Income Tax, donations to recognized charitable institutions qualify for tax exemption. While the entire donation amount isn’t eligible, exemption can be claimed on amounts exceeding Rs 200.
Remember, effective tax planning can result in substantial savings. Explore these options before the financial year ends to optimize your tax strategy.
