Tax Saving Tips and Tricks- A Registry Product
Every single people want to increase their income and also want to save their tax too, but it is not easy to save tax if you don’t have any knowledge about it. Let us help you about your tax saving.
It takes time to plan tax savings. We just rush out at the end of the financial year and we could not save that much as we think. For some, it is a last-minute job. It depends that how early you have started. There are so many under sections the income tax
act 1961 which deals with tax deduction and exemptions like 80C,80D, 80E, 80G and many more.
Secure your health by saving tax
We all know how much health insurance is important for anyone. The medical cost is becoming expensive day by day, so now a day’s
health insurance is necessary for anyone. Now you are thinking,what is the connection between health insurance and tax saving! Because we all know health insurance doesn’t give so much return
like other policies.
Under section 80D you can save up to 35,000. If you are paying health insurance premium you can save tax it depends on how much premium you are paying.
Deduction for the upper limit is ₹15,000 and it also can be extended for senior citizens which are up to ₹20,000. So if one take a health insurance plan for himself/ herself and also for
his/her parents he can save up to ₹35,000 which will deduct from his/her taxable income. But section 80D is not applicable for group health insurance by employers.
Life Insurance also can save your pocket
Let’s talk about how life insurance saves your tax. We know that some of you are judging us that why we are talking about life
insurance because we all know that it is not a pure tax saving option. You can save up to 1lakh with the help of section 80(C). It will depend on how much you pay for your insurance premium. It will
deduct from your total income.
The premium which is paid for ULIPs (Unit Linked Insurance Plans) is excluded from taxes under section 80(C). And also the lump sum amount which
is received by beneficiaries is not taxable, as per section of 10 (10D). 1/3 amount which you receive from pension plan is not taxable but 2/3 percent of that lump sum amount is taxable.
Mutual Funds saves tax (ELSS)
ELSS mutual fund is designed for tax saving. It is an equity linked savings scheme mutual fund. It is a high risk financial instrument,
but this gives high returns. The minimum lock in period of this fund is 3 years. The 65% of this fund is invested on equity so this has high risk but it can give return up to 50% which makes it
amazing.
You can invest in ELSS by SIP (Systematic Investment Plan) and also in lump sum. This makes this to ₹1,50,000. This product is also under 80(C).
National Pension Scheme saves your tax
Pension Scheme helps you to save tax up to ₹1 lakh under the section of 80(C). This is one of the most popular taxes saving option. Maximum 10% of your salary is deductable in this scheme.The NPS is tax deductable.
Save your tax with provident fund
Public Provident Fund is one of the best tax saving instrument.Though you can say, it is a long term thing yes it is but you can save tax with it and as it is a government financial instrument so
it is extremely safe and it gives a return of 8%. The lock in period of this instrument is 15years. You can contribute maximum 70,000 for this. And the most amazing thing about this is the
return is completely tax- free. But if you are looking for short time thing, this is not for you.
Now we will
talk about NSC (National Savings Certificate). This also gives same benefits as PPF (Public Provident Fund). This is also completely
safe. But the one problem about it is the return of this fund is not tax free. So that’s why this won’t come in our list.
So it was the list but there are also other options you should know which helps on tax savings they are-
- Loans
- Senior Citizen Saving Scheme(SCSS)
- Fixed Deposit Schemes(FD’s)
- Rajiv Gandhi Equity Savings Scheme (RGESS)
- Voluntary Provident Fund(VPF)
80C Tax Rebate
80C is one of the most favorite tax savers of tax payers. You can save up to ₹1, 00,000.
Eligibility for 80C
This deduction is only available for individuals and HUFs. This kind of investments allows you to save up to Rs. 1lakh.
- ELSS
- NSC, PPF, SCSS
- 5 year post office term deposit, 5 year tax saving FD(Fixed Deposits)
- PF both voluntary and mandatory.
- Life Insurance on you, dependent children, parents,spouse. (Premium should not get exceed 20% of sum assured).Also applies for ULIPS and also for traditional policies as well.
- Annuity or Pension Fund
There are also some deductions you can claim under section 80C
- Principal of home loan.
- Stamp Duty and registration on home purchase.
- Tuition fees on your child’s full time education
There some issues which can cancel your 80C tax saving deduction. They are- If you sold your house before five years. If
you surrender your ULIPs before five years. Or if you surrendered or terminated your life insurance before two years your 80C tax benefit will be cancelled.Maximum deduction limit under 80C
You can claim 1lakh under the 80C either for expenses/ investment. It depends which one is greater. Deduction is under 80C, 80CCC (pension or annularity), and 80CCD (NSC) has been clubbed at Rs. 1akh.How to get benefits from 80C?
Basically PF is automatically debited from your salary. You should check how much that covered for you, before you put your money on ELSS or PPF.
If you are paying a home loan, provide documents about it and other investment details to your employer. They will give you tax benefits by cutting less TDs.
You can also
claim these deductions by putting them on ITR forms.
Make sure on this matter that you are getting full benefits.Submit all your details for full benefits.
80D Tax Rebate
We all know the expenses of medical, and it is going up day by day.But a health insurance can really help you on your medical expenses and also in your tax. Now the question is how? Let’s discuss about it. This section saves tax up to ₹35,000.
Eligibility for 80D
An individual or HUF can claim 80D exemption if he/she is paying any health insurance for himself/ herself, dependent parents or children, spouse. You can
also claim if you are contributing to a CGHS (Central Govt. Health Schemes) for yourself or your family. For getting this you should not pay by cash. That won’t be acceptable.
Maximum Deduction Limit under 80D
You can deduct ₹15,000 under the section of 80D. If your parents are senior citizen and resident you can get ₹20,000 for them total is
₹35,000. This is the maximum limit. But it will depend how much your premium is. This amount will change as per your premium. If you are a NRI, you won’t get this tax deduction under 80D.How to get benefits from 80D?
You can avail 80D tax benefits by submitting the documents to your HR. They will
adjust your TDs adding it on your salary or you also can claim it while filling income tax returns. You have to put the amount of premium while filling up the ITR form.
80EE Tax Rebate
Individual home buyer can avail this on their home loan. This income tax had started applicable from assessment year 2014-15. This is under section 24.
Eligibility for 80EE
- Loan is sanctioned by a financial institution or housing finance company between 1st April 2017 to 31st March 2017.
- The loan amount must be 25lakh or less than it and his or her residential house should be less than 40lakh.
It must be the only house owned by the taxpayer at the same time.
Maximum deduction limit
Under the section 80EE of the Income Tax Act (1961) tax deduction can be claimed for the first time home buyers for the amount they pay on their home loan interest rate. The maximum deduction is ₹50,000 during a
financial year. The amount also can be claimed beyond and over the deduction of section 24 and section 80C, which are ₹2, 00,000 and ₹1, 50,000 respectively. The 80EE section was first designed
on FY 2013-14for individual taxpayers to avail tax deduction on home loan. On that time the maximum deduction was ₹1, 00,000. It was only available for two years FY 2013-14 and FY 2014-15. And
this section was reintroduced on 2016-17 and the quantum deduction was changed to ₹50,000.How to get benefits from 80EE?
You can avail 80EE tax benefits by submitting the documents to your HR. They will adjust your TDs adding it on your salary or you also can
claim it while filling income tax returns. You have to put the amount of premium while filling up the ITR form.
80TTA Tax Rebate
The interest on savings account has income tax exemption up to ₹10,000. This new section was inserted on 2012.
Eligibility for 80TTA
If individuals and HUF’s have savings account on bank, post office or co operative society and if they earn interest from that account that is not taxable but it is not same on savings like FD and RD.
This deduction is not applicable if this account is behalf of a firm, associate of a person or body of individuals.
Maximum deduction limit
Up to 10,000 can be claimed on 80TTA.How to get benefits from 80TTA?
You can submit certificate from bank to employer to get this deduction from
salary TDs. You can also avail this while filling your ITR form.
80G Tax Rebate
When you donate money to charitable funds established by govt. It also deducts tax depending on the amount you donate. It is covered under 80G.
Maximum deduction limit under tax 80G
- 100% deduction on donation.
- 50% deduction on donation.
- 100% deduction subject to qualifying limit.
- 50% deduction subject to qualifying limit.
The qualifying limit refers to 10% of adjusted gross total income. This mean the deduction can be 50% or can be 100% of the donation amount with maximum limit of 10% of your adjusted total income.
Eligibility for 80G
100% Deduction on
- Prime Minister National Relief Fund
- National Defense Fund
- Prime Minister’s Armenia Earthquake Relief Fund 176
- The Africa Fund
- The National Foundation for Communal Harmony
- TApproved University or educational Institution of national eminence
- The Chief Minister earth quake relief Fund, Maharashtra
- Donations made to Zila Saksharta Samitis.
- The National Blood Transfusion Council or a State Blood Transfusion Council.
- The Army Central welfare Fund or the National Benevolent Fund or The Air Force Central Welfare Fund
- National Children’s Fund
50% Deduction on
- Jawaharlal Nehru Memorial Fund
- Prime Minister’s Drought relief Fund.
- Indira Gandhi Memorial Trust
- The Rajib Gandhi Foundation
100% deduction subject to qualifying limit. The govt or a local authority for promoting planning. 50% deduction subject to qualifying limit.
- the govt or a local authority for promoting planning.
- Any authority in India is engaged in housing development, city or village development.
- Repair work of temple, mosque, church, gurudwara etc.
How to get benefits from 80G?
You can avail 80G tax benefits by submitting the documents to your HR. They will
adjust your TDs adding it on your salary or you also can claim it while filling income tax returns. You have to put the amount of premium while filling up the ITR form.
54 Tax Rebate
If you sell your residential house for profit you have to pay income tax. If you held the property 3 years or longer it becomeslong term capital gains. Under the section 54 you can get exemption on your tax which is so reliable and helpful.
Eligibility for 54
- You have to buy another residential property within 2year or before 1 year of sale of the residential house.
- You should be an individual or HUF
- You have to construct a residential property within 3years of sale of the old residential house.
- The new house shouldn’t be selling for 3 years.
Maximum deduction limit under tax 54
There is no particular limit on tax 54. It will depend on the amount you will get.
54EC Tax Rebate
If you make profit on selling of any long term capital asset you have to pay your tax, but if you invest in specified govt. bond you can claim tax exemption under 54EC income tax act.
Eligibility for 54EC
- You should invest on special Rural Electrification Corporation (REC).
- You should invest on National Highway Authority of India (NHAI).
Maximum deduction limit under tax 54EC Up to 50lakh can be invested in REC and NHAI bonds.
24b Tax Rebate
Section 24b deduction is sometimes referred to as Interest Tax Shield on home loan. It allows income from House Property to be reduced by the amount of interest component of home loan taken for constructing or buying it.
Eligibility for 24b
House property refers to house or any land attached to it. Any kind of borrowing qualifies for
section 24b deduction, irrespective of whether it is from a bank,financial institution, friends or relatives. Interest repayment of a loan taken to repay the original borrowing also qualifies
for tax deduction.
If you started paying any interest before completion of construction, that portion can be deducted in 5 equal installments spread over 5 successive years starting
immediately from the year of completion of construction of the house.
If the loan is taken for construction it should be finished and you should acquire the house within 3 years of
borrowing.
You need to produce a certificate from the bank or the lender with details of your interest repayment in order to claim deduction under section 24 b.
Maximum deduction limit under 24b
- For borrowing on house property bought, constructed, renewed, repaired or reconstructed before 1st April 1999: Rs 30,000
- For loan on house property bought or constructed within 3 years of borrowing provided it was borrowed after 1st April 1999: Rs 1.5 lakhs
- For renewing, repairing or reconstructing house on borrowing after 1st April 1999: Rs 30,000
- For house property bought or constructed after 3 years where capital was borrowed after 1st April 1999: Rs 30,000
- For borrowing on a house property that is let out: entire interest amount payable in that year
80CCG Tax Rebate
This section of income tax also called as Rajiv Gandhi Equity Savings Scheme, 2012 (RGESS). Residential individual with income less than 12lakh uses demat account for the first time to buy
notifies shares, mutual funds or ETFs can claim 50% deduction on the invested amount. The lock in period is for three years. RGESS was introduced to encourage small investors to invest in market.
Eligibility for 80CCG
- Should be new as retail investor.
- Your income doesn’t exceed 12lakh.
- Share must belong to BSE-100, NSE-100, maharatnas,navratnas, miniratnas FPOs of these companies or IPOs of PSUs with 51% government shareholding are also eligible.
- NRI can’t avail this benefit.
Maximum deduction limit under 80CCG The maximum investment you can do in this plan is 50,000. You can only claim the 50%deduction of the amount investment.How to get benefits from 80CCG?
You can avail 80CCG tax benefits by submitting the documents to your HR. They will adjust
your TDs adding it on your salary or you also can claim it while filling income tax returns. You have to put the amount of premium while filling up the ITR form.
10(13A) Tax Rebate
Section 10(13A) helps you to pay your rent and exempt it from your tax amount.
Eligibility for 10(13A)
- If you stay in a rented house.
- You must have your rental receipt.
- You should upload your receipt to your HR.
Maximum deduction limit under 10(13A)
- Actual HRA
- Actual rent less 10% of salary.
- 40% of the salary (50% in metro areas)
- If your actual rent is less than 10% of your salary you can’t have this tax deduction.
80GGA Tax Rebate
If you are a salaried person this tax benefit is for you. If you make any contribution on any institution who are involved in scientific research, rural development, conserving natural resources etc.
Eligibility for 80GGA
- Institution, university, college or scientific research centre for scientific research.
- Institution, university, college for research in social science or statistics
- Association or institution for Rural Development program
- PSU, local authority or any institution approved by the National Committee for Promotion of
- Social and Economic Welfare for eligible project or scheme
- You need to produce certificate from such a PSU/institution for donation made
- Association or institution for conservation of Natural Resources
- Central Govt fund for Afforestation
- Rural Development fund of the Central Govt
- National Urban Poverty Eradication fund of the Central Govt.
Maximum deduction limit under 80GGA
100% of donation can be claimed for tax deduction.How to get benefits from 80GG?
You can claim it while filling income tax returns.
80GGA Tax Rebate
If you are a salaried person this tax benefit is for you. If you make any contribution on any institution who are involved in scientific research, rural development, conserving natural resources etc.
Eligibility for 80GGA
- Institution, university, college or scientific research centre for scientific research.
- Institution, university, college for research in social science or statistics
- Association or institution for Rural Development program
- PSU, local authority or any institution approved by the National Committee for Promotion of
- Social and Economic Welfare for eligible project orscheme
- You need to produce certificate from such a PSU/institution for donation made
- Association or institution for conservation of Natural Resources
- Central Govt fund for Afforestation
- Rural Development fund of the Central Govt
- National Urban Poverty Eradication fund of the Central Govt.
Maximum deduction limit under 80GGA
100% of donation can be claimed for tax deduction.How to get benefits from 80GG?
You can claim it while filling income tax returns.
24a Tax Rebate
Like salary, a profit from business income from house is also treated as a separate income source. Section 24 offers certain income tax deduction on income which comes from house.
Eligibility for 24a
- You should own that hose.
- Maximum deduction limit under 24a
- The tax deduction is 30% of the annual value of the tax.
10(5) Tax Rebate
If your employer includes LTA on your salary you can get this benefit. These taxes breaks give you travel allowance.
Eligibility for 10(5)
- Travel should be in India.
- Travel cost on yourself, spouse, parents, brother and sister, child (if they born after 1st October 1998).
- In a block of four calendar years you can claim deduction on LTA for 2 journeys.
- Travel should be in India.
- Economy class of national air carrier
- AC First class by rail.
Maximum deduction limit under 10(5)
Here travelling cost means transport cost you can’t claim the food cost or accommodation cost.
80DD Tax Rebate
Government always encourages that fact if you are taking care of a disable person. So there is also a tax benefit if you are doing it.
Eligibility for 80DD
- The person who have applied for this must be individual or HUF.
- That person should be an Indian resident.
- A dependent could be a spouse, parents, brother, sister or child of individual.
- Autism, Blindness, cerebral palsy, low vision,Leprosy-cured, Hearing impairment, Loco motor disability ,Mental retardation, Multiple disabilities. Mental illnesses
- NRI’s can’t claim
Maximum deduction limit under 80DD
The flat deduction is 50,000. If the disability is severe the deduction can be up to 80% or more but the limit is 1lakh.How to get benefits from 80DD?
You can avail 80DD tax benefits by submitting the documents to your HR. They will adjust your TDs adding it on your salary or you also can claim it while filling income tax returns. You have to put the amount of premium while filling up the ITR form.
80GGC Tax Rebate
80GGC is for non corporate tax payers who want to make donation on political party. 80GGB is for companies. This was introduced on 2009-10 to make election funding.
Eligibility for 80GGC
- You have to donate a corporate party who is registered under 29A.
- If the donation is made on an electoral trust set up for funding the election.
- If the donation is made on cash it won’t be eligible.
Maximum deduction limit under 80GGC
100% deduction can be claimed.How to get benefits from 80GGC?
Salaried person with no income from business can claim it while filling their ITR file.
80E Tax Rebate
The interest rate you pay for your educational loan also can be claimed on 80E Tax rebate.
Eligibility for 80E
- You have to take your educational loan from bank or other government registered financial institution.
- Here higher education stands for graduate or post graduate education on medicine, engineering, statistics,management.
- You should pay your interest for spouse, child or yourself or if you are a legal guardian of someone.
Maximum deduction limit under 80E
The entire portion of that loan can be claimed within eight years of repayment.
How to get benefits from 80E?
You can avail 80Etax benefits by submitting the documents to your HR. They will adjust
your TDs adding it on your salary or you also can claim it while filling income tax returns. You have to put the amount of premium while filling up the ITR form.
80DDB Tax Rebate
If you or your family members are attacked by any serious disease then this tax exemption is for you.
Eligibility for 80DDB
This is applied for individual or HUF’s and also for your spouse, children, parents, brother or sister.
- Neurological disease with disability of at least 40%
- Motor Neuron Disease
- Dementia
- Dystonia Musculorum Deformans
- Ataxia
- Aphasia
- Parkinsons Disease
- Hemiballismus
- Cholera
- AIDS
- Malignant Cancer
- Chronic Kidney Failure
- Hematological Disorders
- Hemophilia
- Thalassaemia
Maximum deduction limit under 80DDB
The maximum limit is ₹40,000 but in the matter of senior citizen it can be up to ₹60,000How to get benefits from 80DDB?
You can avail 80DDB tax benefits by submitting the documents to your HR. They will adjust
your TDs adding it on your salary or you also can claim it while filling income tax returns. You have to put the amount of premium while filling up the ITR form.
80GG Tax Rebate
Most of salaried people get tax exemption on the HRA part of their salary. But if you don’t get HRA you can have this tax exemption.
Eligibility for 80GG
If you are a salaried individual or a self employed or an HUF you can get this tax deduction.
- If you spend more than 10% of your annual income on rent.
- You, your spouse or your minor child can’t have a house where you are residing.
- If you own a house any other place and if you don’t want tax exemption from that house.
-
Maximum Deduction limit under 80GG
- Maximum 2,000(per month)
- 25% of total income
-
How to get benefits from 80GG?
You can avail 80GG tax benefits by submitting the documents to your HR. They will adjust your TDs adding it on your salary or you also can claim it while filling income tax returns. You have to put the amount of premium while filling up the ITR form.
80U Tax Rebate
Disabled person who lives in India can claim flat deduction on income tax by submitting their certificate of disability.
Eligibility for 80U
Autism, Cerebral palsy, Blindness,
Low vision, Leprosy-cured, Hearing impairment, Loco motor disability, Mental retardation, Mental illnesses, multiple disabilities.
This tax deduction is not available for NRI’s.Maximum deduction limit under 80U
You can claim up to 50,000 but if there is multiple disabilities you can claim up to 1, 00,000.How to get benefits from 80U?
You can claim it while filling income tax returns. You have to put the amount of premium while filling up the ITR form.
54F Tax Rebate
If you gain from capital assets like shares, bonds, properties,gold etc your income will be taxable but if you use that money to construct your residential property you can claim exemption. This
exemption is eligible for all kind of long term property but not for residential house.
-
Eligibility for 54E
- Buy another property within 2 years or buy it before the 1 year.
- Construct a new residential property within 3 years.
Maximum deduction limit under 80U
The entire capital gains can be exempted.
10(10D) Tax Rebate
Amount you received from an insurance policy also can be exempt
from your tax.
-
Eligibility for 10(10D)
- Pension plan or payout annuity is not included in this plan.
- Insurance policy for a disable dependent is excluded.
- Life insurance sponsored by employer is excluded.
- Any policy where premium in any year is more than 20%of the sum insured if it were bought after 1st April 2003 but
before 31st April 2012 or is more than 10% of the sum insured if it were bought after 1st April 2012.
- Life insurance policy bought after 1st April 2013 for disabled or those suffering from ailments in section 80DDB if
premiums are more than 15% of sum assured.
The above conditions do not apply to death claims or any amount received on death of the insured person.
Maximum deduction limit under 10(10D)
There is no cap on the extent of tax free income from life insurance proceeds. Any
amount received is exempted from income tax as long as conditions above are fulfilled.
80CCF Tax Rebate
investment in long-term infrastructure bonds up to Rs. 20,000 is eligible for tax deduction. Tax deductions under Section 80CCF was extended in 2011-12, but not extended in 2012-13. So, in spite of your continued investment, you cannot claim tax deduction.
