Salaried taxpayers constantly struggle between income and tax savings. While most people know about the deductions of upto ₹1.5 lakh under Section 80C of the Income Tax Act, there are various other ways to save you tax. According to Prashant Joshi, Co-Founder and Partner, Financial Research and Advisory Services, Fintrust Advisors, understanding one’s taxable income is a pre-requisite, as allowances and deductions for salaried and selfemployed individuals are different. One should know there are taxsaving expenses and tax-saving investment instruments and both help in optimising and maximising tax saving, he says.
Tax saving expenses like insurance premiums, children’s tuition fees, EPF contribution and home loan repayment let you avail tax benefits under Section 80C. Expenses on health insurance premium paid for yourself, spouse, children and dependent parents under Section 80D allow one to go beyond the ₹1.5 lakh limit set under Sec 80C.
“Though Section 80C does offer a major tax-saving deduction, there are other sections that one can explore like 80D, 80E (repayment of an education loan), 80EE (interest payment of the home loan for first-time buyers), 80DD (for a dependant who is differently-abled), and 80GG (rent paid for accommodation), among others. One should consult a tax-planner for better understanding of these sections and their application to save the tax outgo,” Joshi advises.
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