While investment in instruments under Section 80C is popular, there are many tax saving sections that largely go unnoticed. Read on to know about five such minimally used tax saving sections.
The fag end of the financial year is usually followed by the last minute rush to seek possible tax saving options. While investment in instruments under Section 80C is popular, there are many tax saving sections that largely go unnoticed.
In this article, we take a look at five such minimally used tax saving sections and how they could help you in availing tax benefits.
1: Section 80D
While having a Medical Insurance policy provides you and your family a protective health cover, the premium amount paid for the policy can help you with tax savings. The Section 80D of the Income Tax Act, 1961 offers tax deduction up to Rs 25,000 for all Health Insurance premiums paid for one’s own self, spouse and children. The tax exemption limit is further raised to Rs. 30,000 for individuals with either parent of the assessee above 60 years of age. Therefore, if you are paying Health Insurance premiums for yourself, children, spouse or your parents, you can avail a tax exemption of Rs. 55,000. It is important to note that you cannot claim deductions on premiums paid through cash.
2: 80TTA
The common perception is that the interest earned on Savings Bank Account is taxable. While the interest in indeed taxable, Section 80TTA allows for a tax deduction benefit of Rs. 10,000. You can claim for a tax deduction for interest up to Rs. 10,000 under Section 80TTA for savings bank account. However, it is not offered for interest on other instruments like a bank Fixed Deposit. So, effectively if you have earned an interest of Rs. 15, 000 in the financial year from all your saving bank accounts, you will be paying tax on only Rs. 5000 after availing deduction of Rs. 10,000 under Section 80TTA.
3: Section 2(28A)
When it comes to tax and home purchase, mostly the tax deduction on principal and interest on the Home Loan is considered by borrowers. If you have taken any loan where the bank or the financial intuition has charged you a loan processing fee, you can make use of Section 2(28A) of the I-T act and avail tax deductions. Under Section 2(28A), a service fee charged while borrowing money or any debt incurred as per Section 2(28A) is liable for tax deductions. Since the loan processing fees is considered as a service fee it can be rightfully claimed as a tax deduction.,
4: Section 80DDB
The Section 80DDB helps you avail tax deductions for expenses on medical treatment of specified ailments like AIDS, cancer and neurological diseases for up to Rs. 40,000 for individuals, Rs. 60,000 for senior citizens and Rs. 80,000 for age 80 and above.
5: Section 80G, 80GGA and 80GGC
Under Section 80G any donations made to various funds or temples can qualify for tax deductions between 50 to 100%. The Section 80GGC of the I-T Act offers you tax deductions for donations made to any political party with no upper limit on the sum. Donations made to universities or institutions approved by the government under 35(1) (ii), 35(1) (iii), 35CCA, 35CCB offering scientific research qualify for deductions under Section80GGA.
BankBazaar.com is a leading online marketplace in India that helps consumers compare and apply for Credit Card, Personal Loan, Home Loan, Car Loan, and insurance.