Some Income Tax Deductions That Help You Save Money

Most of you may be aware of the tax benefits under Section 80C and 80D of the Income Tax Act, 1961, as people use them largely to reduce their tax burden. But are you aware of the tax benefits available under other sections of the Income Tax Act? With their help, you can reduce the tax on your income more. Therefore, through this article, we are going to give you information about the tax saving provisions given under the Income Tax Act, 1961, about which very few people know.

Tax benefit on investing in NPS (Section 80 CCD)

Almost all of you know that investing in NPS provides tax benefits under Section 80C, but very few people know that investing in NPS also provides tax benefits under Section 80CD. Recently the government has included tax deduction under Section 80 CCD in NPS investment. Now investors can avail additional tax deduction of Rs 50 thousand after investing in NPS after the limit of Section 80C.

On Home Loan Interest (Section 24)

Home loan works for you in two ways. First, it helps you to buy a house and second, it also saves your tax. Individuals who have taken a home loan and are paying the EMI of the home loan can claim tax deduction under section 24 of the Income Tax Act 1961. You can claim tax benefits of up to two lakh rupees in a financial year after paying home loan interest. Earlier you could claim more tax deduction than this, but now the maximum tax deduction under Section 24 on home loan has been increased to Rs 2 lakh per year.

On education loan interest (Section 80E)

Education loans can also serve as a tax saving tool besides helping students to pursue higher education. The government provides tax benefits to students who complete their further education by taking education loans. A person taking an education loan can claim a full tax deduction under Section 80E on the interest given on the loan. This tax deduction can be availed only by the person who is paying the EMI of the education loan. If you have taken a loan as a co-borrower with your spouse or parents, they too can avail of this kind. However this benefit can only be used by one person. The deduction can be claimed only if the loan for higher education is taken. Tax deduction can be claimed for a maximum period of 8 years from the time of sanction of loan.

Tax benefits on health insurance (Section 80D)

Health insurance not only acts as a saver of your health expenses, but also saves your tax. There is a provision in the Income Tax Act, under which a person can claim tax deduction on payment of premium for himself and his family’s health insurance scheme. If you are paying the premium for self or family health insurance policy, then you can claim a tax exemption of Rs 25,000 under Section 80D of the Income Tax Act, 1961. Under this provision, senior citizens can claim tax exemption of up to Rs 50 thousand. You can avail additional tax benefit of Rs 5 thousand on the expenses incurred on health check up, provided the premium is paid online or through check.

Stamp and Registration Fee (Section 80C)

Many people are not aware of this provision. You can claim the tax exemption on the stamp duty charge and registration charge incurred while purchasing the house. This claim can be claimed under Section 80C within one year of purchasing the property. There is no specified limit for claiming such deduction.

On the treatment of specific diseases (Section 80 DDB)

Tax deduction can be claimed by any person or members of HUF for expenditure incurred on treatment of specific diseases under Section 80DDB. Tax benefits can be claimed on treatment of diseases like kidney, AIDS, cancer, neurological etc. Under this provision, the benefit of tax deduction is available only if you have not reimbursed the cost of treatment from the insurance policy.