Explore the Top 5 Tax Saving Options Other than 80C

Understanding how to save on taxes is like having a secret weapon for growing your money. While many of you might know about Section 80C for saving taxes, there's a whole world of other options waiting to be explored. Whether you're a seasoned saver or a beginner, optimising your tax savings can significantly impact your financial journey. In this guide will deep dive into the list of some of the best tax-saving options other than 80C that can be your key to saving on taxes. 

Before learning about the tax saving schemes other than 80C, let us first get an overview of Section 80C. 

What is Section 80C?

Section 80C of the Income Tax Act, 1961, is a popular choice for many taxpayers because it lets them lower their taxable income. Individuals and Hindu Undivided Families (HUFs) can claim this deduction with the maximum deduction amount of INR 1.5 lakhs each year under this section. It is a great way for individuals and HUFs to reduce their tax burden. 

However, it’s crucial to note that companies, and partnership firms, are not eligible for this benefit. Furthermore, it is important to note that the total deduction under Section 80C, 80CCC, and 80CCD (1) combined cannot exceed INR 1.5 lakhs. 

Under this section, eligible investments and expenses include the following:

• Investment in Equity Linked Savings Scheme (ELSS) funds
• Investment in Tax-saving Fixed Deposits
• Investment in Sukanya Samriddhi Yojana
• Investment in Public Provident Fund (PPF)
• Investment in the National Pension System (NPS)
• Investment in Unit Linked Insurance Plans (ULIPs)
• Tuition fees paid for children’s education (up to a maximum of 2 children)
• Life insurance premiums
• Repayment of home loan principal amount

5 Best Tax Saving Options Other than 80C

Now that we've given you a glimpse of how Section 80C can help you save on taxes, let us now help you explore more ways to cut down your tax bill. 

1. Section 80EE: First-time Home Buyers

If you're a first-time homebuyer, you can claim a tax deduction of up to INR 50,000 under Section 80EE. This is an additional benefit on top of the INR 2 lakhs tax benefit for housing loan interest repayment under Section 24. 

To be eligible for tax deduction under Section 80EE of the Income Tax Act, the valuation of your house should be under INR 50 lakhs, and the home loan amount should not exceed INR 35 lakhs. 

2. Section 80D: Health Insurance Premiums

Another best tax saving scheme other than 80C is Section 80D. Under  80D, you can claim a deduction for health insurance premiums for yourself and your family. You can get up to INR 25,000 deduction for your spouse, children, and yourself. An additional INR 25,000 can be claimed as a deduction for your parents, totaling to INR 50,000. 

If you're below 60 years of age and your parents are above 60, the limit is INR 75,000. If both you and your parents are above 60, the claim amount goes up to INR 1 lakh. In addition to all this, any preventive medical check-ups of up to INR 5,000 for the family or self, are also eligible for tax deduction under Section 80D. 

3. Section 80E: Education Loan Repayment

Section 80E offers individuals an opportunity to reduce their tax burden if they have taken education loans. Under this section, the interest paid on an education loan qualifies for tax savings. It's crucial to understand that this tax saving option other than 80C is applicable for a maximum of 8 years or until the interest is fully paid off, (whichever comes earlier). This means that individuals repaying education loans can enjoy tax savings throughout their loan repayment. However, the loan must be taken from a recognised financial institution and must be for higher education.

4. Section 80DD: Treatment of Disabled Person

Individuals and Hindu Undivided Families (HUF) supporting a disabled family member can claim exemptions under Section 80DD. The limit of the deduction is INR 75,000 for 40%-80% disability and INR 1,25,000 for disability higher than 80%. This applies to the total income spent on treatment and well-being of the disabled family member.   This can aid in reducing the financial load that comes with caring for a family member with a disability.

5. Section 80CCC: Donations to Charitable Institutions

If you've made any donations to any approved charitable institution/trust, you can claim tax exemption under Section 80CCC of the Income Tax Act. For cash donations, the limit is capped at INR 2,000, so it's highly advisable to make donations via bank cheque. Also, make sure that you have a stamped receipt from the trust with its address and a PAN card mentioning the trust's name.

Conclusion

It's always good for taxpayers to know about tax-saving options beyond Section 80C, but the goal should always be to save on taxes without causing financial stress. Moreover, make sure you use tax deductions wisely where needed, and aim to lower your income tax responsibility while keeping your overall financial well-being in check. So, choose a tax-saving option that aligns with your needs and financial goals.

Frequently Asked Questions (FAQs)

Q1: Why is Section 80C popular, and who can benefit?

Ans. Section 80C is popular for reducing taxable income, benefiting individuals and HUFs. 

Q2: What's the extra benefit for first-time homebuyers under Section 80EE?

Ans. First-time homebuyers can claim an additional deduction of up to Rs.50,000, on top of the Rs.2 lakhs under Section 80EE of the Income Tax Act. 

Q3: How does Section 80E benefit those with education loans?

Ans. Section 80E allows tax savings on education loan interest for a maximum of 8 years or until fully paid. The loan must be for higher education and from a recognised institution.