The tax planning season has begun and individuals would now
look to beat the deadline set by their companies to handover tax investment
proofs. Other practising professional have time until March 31, 2016 to do
their tax planning. Before planning your taxes one should be aware of the total
income and tax liability in order to be smart tax saver.
The government has
provided with many plans using which individuals can make better investment
decision along with tax saving options. Individuals often get stuck with 80C
tax benefits only during tax planning. While there is little doubt 80C
investments are best for tax saving purposes, there are other investment
options which can help you save tax if invested smartly. Here are 7 best tax
saving options other than Sec 80C.
1) New Pension Scheme (Section 80CCD) The Pension Scheme has
had a few changes this year. For instance one can get an additional tax benefit
of Rs 50,000 if you park money in the scheme, which is now a part of Sec 80CCD.
The other benefit that one gets is that one can now invest in the scheme in
equity as well.
2) Rajiv Gandhi
Equity Savings Scheme (Section 80CG) Under this scheme individuals can invest
up to Rs 50,000 in approved stocks. The tax benefits are available under Sec
80CG. However, only first time investors are allowed to invest in this scheme
to claim tax benefits.
3) Interest on
education loan (Section 80E) The deduction is allowed only on the interest
repayment part, not on the principal amount of education loan. Means that only
interest repayment is available for tax deduction while filing income tax
return. This deduction is over and above the 80C limit and there is no maximum
limit on claiming deduction under 80E.
4. House rent
allowance (Section 80GG) If you are staying in a rented apartment or house and
paying rent, you can claim tax deduction under Sec80GG of the Income Tax Act.
5. Home Loans (Section 24) In the Union Budget 2015-16,
Finance Minister Arun Jaitley increased the limit on deduction on home loan
interest under Section 24 to Rs 2 lakhs from Rs 1.5 lakhs earlier. The
principal amount also was hiked to Rs 1.5 lakh from the earlier limit of Rs 1
lakh.
6. Health Insurance (Section 80D) Individuals should take a
health insurance policy, which would enable them save tax up to Rs 25,000 in
case of ordinary citizens and Rs 30,000 in case of senior citizens. So, one can
go ahead and take a good health insurance policy.
7) Donations (Section 80G) Section 80G of income tax law
provides tax benefits on amount donated to NGO's.
Source :goodreturns.in