An individual can save the income tax being deducted by the government from one’s gross total income by investing in various avenues specified by the government. But when one thinks of tax saving methods, the first and in most cases, the only thing that crops into our minds is 80C. However, there are other avenues which help us in saving tax as well. They are:
A mediclaim policy is a must nowadays because if you or your family fall sick or meet with an accident. The medical bills incurred due to the unforeseen circumstances could easily wipe out your savings. The amount paid as medical insurance premium (mediclaim) is eligible for deduction under this section. You can take the policy in your or spouse’s name, dependent parents or/and children. An individual can avail a maximum deduction of Rs 25,000 for the premium paid for oneself, spouse or dependent children. One can get an additional deduction of Rs 25000 for the premium paid for one’s parents.
If you have taken an education loan from any financial institution for self, spouse, children, or a student whose legal guardian you are, then you can claim this deduction for the interest paid by you on the loan amount. The amount paid as interest in a financial year is eligible for deduction without any limit. To claim this deduction, make sure that the loan is taken for higher education, i.e., any course pursued after completing 12th standard. This deduction is available for eight years, starting from the first year when the interest payment began.
This deduction is available to an individual for the amount paid as interest on loan taken for the purchase of a residential property. The maximum deduction that can be claimed under this section is Rs 50,000 per annum. As a first time home buyer, suppose the interest paid by you during the financial year was Rs 2.25 lakh. Thus, you can claim the tax deduction of Rs 2 lakh as interest paid under section 24 and an additional Rs 25,000 under section 80EE