Hopefully, you are claiming deduction upto Rs 1.50 Lakh under Section 80C by investing in various eligible options. If not, please read the article here about 80C tax deductions.
After exhausting the limit of Rs 1.50 Lakhs u/s 80C, you must be thinking – Are there more avenues to save tax?
So, here are some options which are allowed as deduction from your income for purpose of tax calculation (other than 80C):
Section 80C – Deductions for eligible investments (upto Rs 1.50 lakh)
Under this section, you can claim deduction upto Rs 1.5 lakh if you make eligible investments. Read my article on 80C deduction.
Section 80D – Deduction for health insurance premium (upto Rs 1 Lakh)
You can claim deduction upto Rs 25000 – for any medical insurance premium paid for yourself, spouse, dependent children, parents. An additional deduction for insurance of parents is available to the extent of Rs 25,000 if they are less than 60 years of age or Rs 50,000 (has been increased in Budget 2018 from Rs 30,000) if parents are more than 60 years old. From FY 2015-16 a cumulative additional deduction of Rs. 5,000 is allowed for the preventive health check up to individuals.
To claim this deduction, you need to pay by mode other than Cash – i.e. by cheque, credit card, debit card etc. If you pay in cash, you cannot claim this deduction.
Section 80DD – Deduction for maintenance including medical treatment of a dependant who is a person with disability. (upto Rs 1.25 lakh)
If you are paying for medical treatment of a dependant person (who has disability), you can claim deduction upto Rs 1.25 lakhs. This deduction is allowed for yourself, spouse, children, parents, brothers and sisters.To claim this deduction a certificate of disability is required from prescribed medical authority.
Payment or deposit to specified scheme for maintenance of dependent handicapped relative:
- i. Where disability is 40% or more but less than 80% – fixed deduction of Rs 75,000.
- ii. Where there is severe disability (disability is 80% or more) – fixed deduction of Rs 1,25,000.
Section 80DDB – Deduction for medical treatment of specified disease (upto Rs 100000)
If you are incurring expenditure for medical treatment of specified disease such as AIDS, cancer, neurological diseases, etc., you can claim deduction upto Rs 40000. The limit is increased to Rs 1 Lakh in case of expense incurred for a senior citizen. This deduction is allowed for individual, the spouse, children, parents, brothers and sisters.
Any reimbursement of medical expenses by an insurer or employer shall be reduced from the quantum of deduction the taxpayer can claim under this section.
Section 80E – Deduction for interest on loan taken for higher education.
If you have taken education loan for yourself, spouse, or children, and paying interest on such education loan, you can claim deduction u/s 80EE for a maximum of 8 years.
The loan must be taken from any financial institution or any approved charitable institution for the purpose of higher education and for the purpose of higher education.
Section 80EE – Interest on Housing Loan sanctioned during FY 2016-2017 (New)
This is newly inserted section, where you can claim deduction for home loan interest paid upto Rs 50000 if your loan is sanctioned during FY 2016-2017 and Value of the property is below Rs 50 Lakh and maximum loan sanctioned should be Rs 35 lakh. This deduction is over and above the Rs 2 lakh limit under section 24 of the income tax act. Read my article on 80EE deduction
Section 80G – Deduction for donations to certain funds, charitable institutions, etc.
If you are making donations to charitable institutions, NGO, government relief schemes etc, you may be eligible to claim deduction upto 50% or 100% of the donation amount. (depending on charity). For e.g. , donation to funds like Prime Minister’s National Relief Fund enjoy 100% deduction and NGOs such as Helpage India, CRY etc is approved for only 50% deduction.
Although, there is no ceiling on the amount that can be claimed as deduction, in some cases the total deduction is limited to 10% of the gross total income of the donor.
From FY 2017-18 any donations made in cash exceeding Rs 2,000 will not be allowed as deduction. The donations above Rs 2000 should be made in any mode other than cash to qualify as deduction u/s 80G.
Section 80GG – Deductions of rent paid
If you are self-employed, oe employee who donot receive HRA, you can claim deduction for your house rent paid, upto maximum of Rs 2000 per month.
The amount of Rs 2000 is very less in today’s condition and government should review this limit.
Section 80GGC – Deduction for contribution made to political parties
If you have made any donation / contribution to any political party, you can claim deduction u/s 80GGC. There is no limit for this deduction , but the payment must be made other than cash.
Section 80TTA – Deduction for Interest on Savings bank Account (upto Rs 10000)
Under this new section 80TTA, you can claim deduction for Interest earned earned inSavings account upto Rs 10000. Please ntoe that such Interest is taxable & should be shown as Other Income and then the deduction should be taken u/s 80TTA upto Rs 10000.
Read my article on 80TTA deduction
Section 80TTB – Deduction for Interest on Deposits for Senior Citizens (upto Rs 50000)
Under new Section 80TTB, a deduction in respect of interest income from deposits held by senior citizens will be allowed from the total income The limit for this deduction is Rs. 50,000. Further, no deduction under section 80TTA shall be allowed. In addition to section 80 TTB, section 194A of the Act will also be amended so as to increase the threshold limit for deduction of tax at source on interest income payable to senior citizens from the existing limit Rs 10,000 to Rs. 50,000.
Section 80U – Deduction for disabled person (upto Rs 1.25 lakhs)
A deduction of Rs. 75,000 is available to a resident individual who suffers from a physical disability (including blindness) or mental retardation. In case of severe disability, deduction of Rs. 1,25,000 can be claimed
Section 87A – Tax rebate of Rs 2000
If you taxable income is less than Rs 5 Lakh, you can claim a tax rebate of Rs 2000 under this new Section 87A.
Read my article on 87A rebate / tax credit
Section 24 – Interest paid on a second home loan is fully deductible
If you have taken home loan & the property is self-occupied , then you can claim deduction for home loan interest upto Rs 1.50 Lakhs.
But, if you take loan for buying second house, buys a second house and give it on rent, you can claim FULL Interest as deduction. The 2nd house is deemed to be let out and rental income or deemed rental income needs to be shown under “Income from house property”. But at the same time, you can claim FULL Interest against such income.
How to Claim these deductions
If you are a salaried employee, you can submit the receipts to your employer, and they can consider the deduction while deducting Tax.
Alternatively, you can claim the deduction while filing your Income Tax returns.
Now, you cannot attach any documents with Income Tax returns, you cannot attach these receipts with return. Just claim the deduction and keep the receipts with yourself, in case ITO ask for it later during assessment.
If you have any tax related queries, please use the comments box below & post your query.