If you haven’t taken advantage of tax savings yet, there’s still time. With just three months left in the fiscal year, making strategic investments can significantly lower your tax liability.
Generally, you have until March 31st to make tax-saving investments for the financial year. As January is already here, making quick investment decisions can be crucial in reducing your tax outgo. Besides the well-known Section 80C for tax savings, there are several other sections in the tax code that offer deductions, potentially leading to a tax refund.
Here are some ways to save on taxes:
National Pension System (NPS): By investing in the NPS, you can save up to ₹1.5 lakh under Section 80C. Plus, there’s an additional deduction of ₹50,000 under Section 80CCD(1B), making a total of ₹2 lakh in potential tax savings.
Health Insurance (Section 80D): You can claim the premiums paid for health insurance for tax relief under Section 80D. The deduction limit varies between ₹25,000 to ₹1 lakh, depending on the policy coverage and the age of the insured.
Education Loan (Section 80E): The interest paid on education loans is deductible under Section 80E, with no cap on the maximum amount that can be claimed.
Home Loan Interest (Section 24): There are two tax benefits for home loan repayments. You can claim up to ₹1.5 lakh for the principal amount under Section 80C and up to ₹2 lakh for interest under Section 24, provided the property is in your name and you live in it.
First-time Home Buyers (Section 80EE): First-time homebuyers can get additional tax relief on home loan interest under Section 80EE, subject to certain criteria related to property value and loan amount.
House Rent Allowance (Section 80GG): If you don’t receive HRA from your employer, you can claim tax relief on rent paid under Section 80GG.
Savings Account Interest (Section 80TTA): Individuals and HUFs can claim tax relief on interest from savings accounts up to ₹10,000 under Section 80TTA.
Disabled Medical Expenses (Section 80DD): Expenses incurred for a disabled dependent are deductible under Section 80DD, with the deduction amount varying based on the degree of disability.
Specified Illness Treatment (Section 80DDB): Medical expenses for specific illnesses like cancer or neurological diseases can be claimed under Section 80DDB, offering relief up to ₹40,000.
Donations (Section 80G): Donations to eligible charities are deductible under Section 80G, although not all contributions may be fully deductible.
Each of these options offers a way to reduce your taxable income and, in some cases, increase your potential tax refund. It’s advisable to consult with a tax professional to determine how these options can best benefit your specific tax situation.
