5 Income Tax Saving Schemes Other Than Sec80C

There is a tendency to almost always focus on tax benefits under Sec 80C. However, one must know that there are many sections under which it is possible to save income tax. Here are a few of them.

National Pension System (NPS)

Did you know that if you invest in the National Pension System, you get an additional tax saving on investing upto Rs 50,000 under the NPS.

The Government launched this scheme in 2009 and you become eligible for additional tax deduction under sub-section 80 CCD(1B) for investment up to Rs 50,000. This is not to be clubbed with tax benefits under 80C, which separately allows you benefits on investment upto Rs 1.5 lakhs.

The NPS is open to employees from the public, private and even the unorganized sectors. This is a good avenue to save tax, but, investment is long-term in nature.

Tax benefits under Sec80E on interest on education loan

If you have taken an education loan for your child, or if for self, you can claim tax benefit under Sec80E. Here the interest on the education loan qualifies for a tax rebate. This means the benefit is available for the child as well as the parent.

There is a limitation that the maximum permissible period for claiming such deduction is 8 years.

Such a deduction can be claimed only by individuals and HUFs are not permitted. The question that one tends to ask is: What is the limit of the interest that qualifies for exemption? At the moment there is no such limit that has been specified.

Health Insurance Premium

If you are paying health insurance premium, remember to claim tax deductions under SEC80D. An amount of Rs 25,000 qualifies for a tax break, while in the case of Senior citizens the amount is enhanced to Rs 30,000.

The exemption limit under this section is stipulated at Rs 60,000 only.

Savings account interest

It's important to know that interest on bank fixed deposits, does not qualify for tax exemption at all. However, if you have interest income on savings account they qualify for tax exemption. The limit here is restricted to Rs 10,000. This means that if your interest income on the savings bank account exceeds Rs 10,000, you need to pay tax on the same.

Donations made under Sec80G

If you make donation to select institutions or organizations as notified by the Central Government, you are eligible tax exemption.

Some of the funds notified by the government include Prime Minister's National Relief Fund, National Defence Fund, Jawaharlal Nehru Memorial Fund, Prime Minister's Drought Relief Fund.

 

You need to have the PAN number of the trust or the institution and do preserve the receipts, while filing tax returns.