The most well-known section of the Income Tax Act of 1961 is Section 80C, which allows a rebate of up to Rs. 1.5 lakh on a variety of loan and investment products.
You should be aware, though, of a variety of additional tools aimed at lowering your taxable income. Other than 80C, such tax-saving choices allow you to boost your annual savings by maximizing your income tax returns.
Earn up to Rs 25 lakhs in cash rewards with Wizely Wednesdays
Because the Income Tax Act contains multiple provisions for tax returns, an individual may not be aware of all of the rules simultaneously. This could result in their losing money due to duplicate tax payments, lowering their annual savings. So we want to assist you in keeping track of your overall taxable income by detailing the different tax-saving provisions that aren't 80C.
Other than the 80C, these acts can also be used to save money on income taxes:
1. Interest Earned on Deposits in Savings Accounts
Section 80TTA offers a deduction of INR 10,000 on income earned through interest. But note that INR 10,000 is the upper limit. It allows you to deduct all interest income from savings account deposits.
If you have any savings accounts with different banks, the total cumulative interest is considered and taxed as 'other sources of income.'
The excess amount over the cap is taxed at rates based on aggregate annual income if such interest income exceeds 10,000 in a year.
Also read: How To Save Tax Under Section 80C
2. Component of Education Loan Interest Paid
This clause exempts income used to pay the interest component of student loans from taxation and there is no limit. Depending on the money needed, an education loan, either unsecured or with collateral, can be taken.
It's worth noting, though, that such waivers are only available for the first eight years of loan repayment. Any income used to cover interest costs after this period is taxed.
Education loans qualifying for such deductions must be taken in the individual's name and used to cover higher education costs for themselves, their spouses, or their children. Other than 80C, it is one of the most common tax-saving strategies.
Download the Wizely app and start earning financial rewards for good financial habits.
3. Section 80D: Limit on Premium Payments for Health Insurance Policies
Health check-up charges are also eligible for a tax reimbursement under Section 80D, but the amount of exemption can vary depending on certain circumstances. You can claim a tax exemption for up to 5,000 in such expenses.
The 25,000 rebates on health insurance are included in this exemption. This means that customers who claim 5,000 in medical check-up expenditures are eligible for a 20,000 premium charge rebate.
4. Section 24B: Amount Paid Towards Home Loans Interest Component
The upper limit for the act is two lakhs.
This clause allows you to deduct interest payments on a home loan from your taxable income. If the house is purchased for personal use, a tax credit of up to 2 lakh on the interest rate can be claimed if the construction is completed within five years of the loan term.
If you decide to rent out your newly purchased property, you will not have to pay any tax on the interest component of the loan.
Also read: 10 Income Tax Planning Tips for Salaried Employees
5. Section 10D: Sum Assured on Maturity of Life Insurance Plans
Limit – The total amount due upon maturity.
Section 10 allows you to claim a tax refund for the total sum promised paid out at your life insurance policy maturity or untimely death of an insured individual (10D).
If the death benefit is taken after April 1, 2012, and the entire value premium costs are less than the whole sum promised, the death benefit is exempt from tax calculations.
If the insurance is purchased before April 1, 2012, the premium expenses must be less than 20% of the total assured to qualify for section 10 exemptions (10D).
Earn up to Rs 25 lakhs in cash rewards with Wizely Wednesdays
6. Section 13A: House Rent Allowance (Included in Salary)
Limit - A set of conditions that must be met.
If your pay breakdown includes the HRA component, this section of the Income Tax Act applies to tax benefits under house rent allowance (HRA). Under this scheme, a total exemption is provided if the following items have a minimum value:
1. HRA was paid out every year.
2. 50 per cent of the annual wage
3. Ten per cent of basic income is spent on rent each year.
Also read: How to Invest Your Money to Save Tax?
7. Section 80GG: House Rent Allowance (Not Included in Salary)
Limit: A set of conditions that must be met.
If your employer does not include the HRA component in your salary breakdown, you can use Section 80GG to seek exemptions on your total taxable income. Other than 80C, such tax-saving investments provide waivers up to the lowest value of the given parameters:
- INR 5,000 per month
- A quarter of one's total annual income
- The annual rent is equal to 10% of the basic annual income.
Earn daily and weekly scratch cards up to Rs 25 lakhs with Wizely Wednesdays.
8. Section 80DDB: Expenses incurred to treat people who have a particular disease or disability
INR 40,000 (1,000,000 for elderly citizens) is the upper limit. Tax exemptions are available for anyone who pays for the treatment of dependant family members diagnosed with specific disorders.
Individuals under the age of 60 also are eligible for a maximum of 40,000 in such instances. As a result, for senior citizens (60-80 years) and super senior citizens, the waiver increases to one lakh (above 80 years).
These waivers are available to treat serious illnesses such as neurological diseases (producing 40% or more in capacity), malignant malignancies, AIDS, chronic renal disease, and haematological conditions.
Other than Section 80C, there are other strategies to save money on taxes that can help you improve your total wealth over time. These products also serve as comprehensive investment tools, allowing for more significant returns or lower mandatory expenses.
Earn up to Rs 25 lakhs in cash rewards with Wizely Wednesdays
(Check out 'Learn & Grow with Wizely' to learn more about tax planning and investments.)
