20+ Income Tax Saving Options Beyond Section 80C: A Comprehensive Guide (List of Tax Saving) (2024)

One of the most popular tax-saving options is Section 80C, which provides investment options for reducing tax liability. It includes tax-free instruments such as life insurance premiums, PPF contributions, five-year term deposits, and ELSS schemes. However, the total exemption through Section 80C investments is capped at ₹1,50,000. By adding NPS investments (Section 80CCD), you can claim an additional ₹50,000, bringing the total deduction to ₹2 lakhs. In addition to Section 80C, there are other tax-saving exemptions to explore under different sections.

List of Tax Saving Options under Section 80

Here is a complete list of tax-free deductions available under Section 80 apart from Section 80C:

Section 80CCD

Deduction For– Contributions to National Pension Schemes (NPS)

Deduction Limit– ₹ 50,000

As per the Central Government’s notification, tax deductions can be claimed for contributions to National Pension Schemes under 80CCD.

Contributions made by an employee, employer or voluntary self-contribution are eligible for deduction. Section 80C allows an overall deduction of ₹1,50,000 lakh plus an additional deduction of ₹50,000 for self-contributions to NPS or Atal Pension Yojana under Section 80CCD(1b).

Section 80D

Deduction For: Premiums Paid Towards Health Insurance Policies

Deduction Limit: Subject to Specific Conditions

Health check-up expenses are also eligible for a tax rebate of ₹5,000 under Section 80D.

The health check-up exemption is inclusive of the ₹25,000 rebate on health insurance. In other words, people who have claimed ₹5,000 for medical check-up costs may be eligible for a rebate of ₹20,000 on their premium charges.

Section 80DD

Deduction For –Medical or rehabilitation expenses paid for a handicapped dependent.

Deduction Limit:

• ₹75,000 for people with 40% to 80% disability
• ₹1,25,000 for people with higher than 80% disability

It is related to the tax deduction available in the following cases:

HUFsand individuals paying for a disabled family member’s treatment and wellbeing are eligible to claim exemptions under Section 80DD on the total income spent.

The coverage limit is determined by the percentage of disability, with people with 40-80% disability eligible for a deduction of ₹75,000.

Whereas, families that are caring for an individual with a disability of more than 80% can receive ₹1.25 lakh for all their related expenses. This benefit is only available to the dependent individual’s family.

Section 80DDB

Deduction For– Medical expenses paid for oneself or dependents in treating a specific illness or disability

Deduction Limit– ₹40,000 (₹1,00,000 for senior citizens)

When you pay for the treatment of a family member diagnosed with one or more specific diseases, you may be eligible for a tax waiver.

Individuals under the age of 60 are eligible to receive a maximum of ₹40,000. Accordingly, such waivers are increased to ₹1 Lakh for senior citizens (60-80 years old) and super seniors (over 80 years old).

A waiver may be given for the treatment of critical illnesses such as malignant cancers, chronic renal disease, AIDS, haematological ailments, and neurological diseases (causing 40% or more disability).

Section 80E

Deduction For– Interest Paid Towards Education Loan

Deduction Limit– No Limit

In the financial year, the interest part of the EMI is deducted. There is no maximum amount that can be deducted.

A bank certificate, however, is required. This certificate should separate the principal and interest portions of the education loan you paid during the financial year.

A deduction will be allowed for the total interest paid. No deductions will be allowed for the principal repayment.

According to the amount of funds required, an education loan can either be unsecured or secured.

It is important to note, however, that such waivers are limited to the first eight years of loan repayment. After eight years, interest paid will be taxable.

Section 80EE

Deduction For– Home Loan Interest for First-time Buyers

Deduction Limit– ₹50,000 | plus benefits from Section 24(b)

If the property value is less than ₹45 Lakh, first-time home-buyers can claim additional interest benefits up to ₹50,000 over Section 24(b) on home loan EMIs. This effectively allows up to ₹2.5 Lakh to be saved in taxes in addition to the Section 80C deduction.

For a tax rebate on EMI payments under Section 80EE, an applicant must not have owned any other property before applying for a home loan.

Section 80G

Deduction For– Donations Made to Charitable Organisations

Deduction Limit– No Limit

Entire contribution to a charitable organisation is exempt from taxes under Section 80G. If the transfers have been made through banks, there is no limit to these tax waivers.

Cash donations are exempt from tax calculations for up to ₹2,000 per year. Such contributions must, however, be made to registered charitable organisations.

Section 80GG

Deduction For– House Rent Allowance (HRA), if NOT Included in the Salary Breakdown

Deduction Limit– Specified Conditions

Section 80GG allows you to claim exemptions on your total taxable income if your company does not include the HRA component in your salary breakdown. In the case of tax-saving investments other than 80C, tax waivers are granted to the least of the following:

• Monthly ₹5,000
• The total annual income of 25%
• 10% of the basic annual income.

Section 80GGA

Deduction For– Donations for Scientific Research and Rural Development

Deduction Limit– No Limit

Tax exemptions can be claimed under Section 80GGA for donations for scientific research and rural development.

Such deductions can be made on 100% of the income spent, as long as it was made through a bank account and documented.

Section 80 GGB

Deduction For– Donations Made to Political Parties or an Electoral Trust

Deduction Limit– No Limit

According to Section 80GGB of the Income Tax Act 1961, any Indian company that contributes any amount to a political party or electoral trust registered in India can deduct that amount from its income tax liability.

Section 80 GGC

Deduction For– Donations Made to Political Parties or an Electoral Trust

Deduction Limit– subject to donation should not be made in cash or kind

Note:The 80GGC can be claimed by any individual except by local governments or artificial juridical persons that receive government funding in whole or in part.

Individuals,Hindu Undivided Families (HUF), firms, AOPs, BOIs, and Artificial Juridical Persons are eligible for making contributions under Section 80GGC. However, the government should not fund the Artificial Juridical Persons.

Section 80TTA

Deduction For– Interest Earned on Savings Account Deposits

Deduction Limit– ₹10,000

A maximum of ten thousand rupees can be deducted from the net total interest earned from the savings accounts with the bank and/or post office. FDs, RDs, and corporate bonds are not included in interest income.

Multiple savings accounts in different banks are treated as a single account, so that their cumulative interest is taxed under ‘income from other sources.

For interest income that exceeds ₹10,000 in one year, only the excess amount over the cap is taxed at rates determined by the aggregate annual income.

Section 80U

Deduction For– Individuals with Disabilities Receive Income Tax Benefits

Deduction Limit:

• ₹75,000 for 40% to 80% disability
• ₹1,25,000 for higher than 80% disability

Section 80U allows disabled individuals to claim tax waivers if they are certified by a registered medical authority to be 40% disabled.

People with disabilities whose disabilities are between 40% to 80% can claim ₹75,000, while those with disabilities more than 80% can claim ₹1.25 lakhs in tax benefits.

Section 24(b)

Deduction For– Income from house property

Deduction Limit– ₹2 lakhs

You can earn tax exemptions on your home loan interest payments as well. Under Section 24(b), interest of up to ₹2 lakhs is tax-free, provided that the construction is completed within five years of the loan term.

Section 10(13A)

Deduction For– House Rent Allowance Provided Under Salary Break-Up

Deduction Limit– Specified Conditions

Salary-earning employees may be entitled to receive House Rent Allowance as part of their pay. You can claim a HRA exemption if you are renting a home. You can claim an exemption up to the lower of the following:

• Amount of HRA actually received
• 50% of your salary if you live in a metro city or 40% if you are in a non-metro city
• Rent paid – 10% of annual salary

Other Exemptions from Salary Income

In addition to the HRA exemption, you can also take advantage of tax exemptions on Leave Travel Allowance, meal coupons, conveyance allowance, medical allowance, etc.

Section 10(10D)

Deduction For–Sum AssuredUpon Maturity of Life Insurance Policy

Deduction Limit– Entire sum assured on maturity/ maturity amount

Under Section 10(10D), the entire amount paid by the life insurance company upon maturity of the life insurance policy either on untimely death of an insured or end of the policy term can be claimed as a tax rebate.

However, such death benefits are exempt from tax calculations if they are taken after April 1, 2012, and the total premiums are less than the full sum assured.

To be eligible for waivers under section 10(10D), the premium expenses should not exceed 20% of the total sum assured if the policy was taken out prior to 1st April 2012.

Gifts, Wills, and Taxation

Money received by way of gift is also tax-free. If you receive gifts from your direct relatives, there is no upper limit on exemption. From non-relatives, however, gifts up to ₹50,000 are tax-free. If you receive cash gifts on the event of marriage, they are completely tax-free without any limit and irrespective of the person giving the gift. Money received through will is also tax-free in your hands.

Do not depend entirely on Section 80C to reduce your tax liability. Though Section 80C does offer a major tax-saving deduction, there are other sections that one can explore. So, use the above-mentioned sections of the Income Tax Act and save your tax outgo.

Read more at: Income Tax Returns and Forms Applicable for Salaried Individuals for AY2023-24

Frequently Asked Questions

1.What is income tax liability?

Tax liability is the amount of tax to-be paid by the income earning individual/business to the government during a financial year. According to the Income Tax Act, the government levies the applicable taxes based on the profits or source of income of the individual/business.

Note that the Act is changed from time to time by the government, hence the tax brackets or tax slab are revised. The tax slabs comprise of different tax rates applied to different incomes levels.

2.How can I reduce tax liability on Capital Gains?

The government provides several tax deduction benefits for Long Term Capital Gains in India under Section 54, Section 54EC, Section 54F, and so on.

3.What is Section 80C under Chapter VIA?

Tax department allows taxpayers to reduce taxable income by making certain investments or eligible expenditures under Chapter VI A.

Section 80C allows deductions for investment made in PPF, EPF, life insurance premiums, Equity-linked Saving Schemes, stamp duty and registration charges for real estate purchases, Sukanya Smriddhi Yojana (SSY), National Saving Certificate (NSC), Senior Citizen Savings Schemes (SCSS), ULIPs, tax saving FDs for five years, infrastructure bonds, etc.

4.How to calculate income tax liability?

Calculating your income tax liability is easy. Just follow the simple formula:

Sum of all Your Earnings = Total Gross Income – Deductions = Taxable Income

5.Where to file the Income Tax Returns?

A new income tax e-filing portal was launched by the Central Board of Direct Taxes (CBDT) on 7th June 2021. In place of incometaxindiaefiling.gov.in, the new income tax portal link is http://www.incometaxindiaefiling.gov.in. Users will need to use the new site to file their income tax returns and complete other tax-related tasks.

6.What is the process to file Income Tax Returns?

It may be necessary for a taxpayer to file an income tax return to report his income, to carry forward losses, or to claim a tax refund. Note it is important to keep all the documents required for calculation and reporting data handy.

7.What documents are required to file Income Tax Returns?

You will need the following documents when filing your Income Tax Returns:

• KYC documents
• Salary slips
• Investment proof in tax-saving instruments
• Certificates of interest from banks/post offices
• All related proof to make claims under the various sections
• Form 16
• Form 26AS

8.What deduction can help save tax under the Income Tax Act?

The Income tax department with a view to encourage savings and investments amongst the taxpayers have provided various deductions from the taxable income under chapter VI A Each of these are for a different tax deduction to help you save tax. For example:

• Section 80C helps save up to ₹1, 50,000 on investments like Life insurance, ELSS, PPF, etc.
• An additional deduction for investment up to ₹ 50,000 in NPS is available under subsection Section 80CCD (1B).
• Section 80D allows tax deduction on premiums paid for health insurance
• Section 80G allows tax deduction on donations to charitable institutes and trusts.

Section 80E allows tax deduction on the interest paid against the education loan.

9.What tax-deductions are available under Section 80D?

The following tax deductions can be claimed by Individuals and HUF under Section 80D:

1. Health insurance premium paid for self, spouse, dependent children, and parents.
2. Preventive health check-ups.
3. The limit of the deduction varies with age.

10.What are the tax deduction limits under Section 80D?

For the health insurance premiums paid by Individuals and/or HUFs, the following are tax deduction limits for the year under Section 80D:

11.Is tax benefit under Section 80D allowed on premiums paid for a critical illness insurance plan?

Yes, under Section 80D tax benefits can be availed on premiums paid towards critical illness insurance plan(s).

If you are paying the premium for critical illness insurance plan or any other health insurance plan, you can claim deductions based on your age.

Those below 60 years of age can avail tax deduction up to ₹ 25,000 annually for self, spouse and children. Those above 60 years of age are allowed a maximum of ₹ 50,000 towards the maintenance of health insurance policy or medical treatment.

You are eligible to claim deduction on premiums paid for your parents. For parents below the age of 60, the threshold is ₹ 25,000. For parents above the age of 60, the threshold is ₹ 75,000. Therefore, if you are paying premiums for self/spouse/children and parents above the age of 60, you can claim a deduction of up to ₹ 75,000.

If you are above the age of 60 and are also paying the premiums of parents (by default above the age of 60), then you are eligible for a maximum of ₹ 1 lakh as a deduction under Section 80D.

12.Is it possible to avail tax benefits for cancer insurance?

Yes, there are tax benefits for cancer insurance. There is no separate Section under the Income Tax Act for cancer insurance. However, you can claim it under Section 80D under premiums paid towards health insurance policy.

13.Is it possible to avail tax deduction under Section 80D on a health insurance policy?

Yes.

Under Section 80D, you are allowed to claim a tax deduction of up to ₹ 25,000 per financial year on health insurance premiums. This limit applies to the premium paid towards health insurance purchased for you, your spouse, and your dependent children.

You can avail tax deduction under Section 80D for health insurance premiums paid up to ₹ 1, 00,000 – only if both you and your parents are senior citizen.

Note that payment of health checkups of up to ₹ 5,000 are also covered under Section 80D.

14.Can I get tax benefits if I pay for my parents’ healthcare?

Yes, you can avail tax benefits on parents’ medical expenses under Section 80D of the Income Tax Act–according to your age either of ₹ 25,000 (below 60 years of age) or ₹ 50,000 (on or above 60 years of age) on your health insurance premiums.

15.What is Section 80DDB? Who is eligible for deductions under this Section?

Section 80DDB allows tax deductions for treatment of specified diseases. It can be claimed by

• Individuals
• their dependents, or
• HUFs.

Medical treatment from Neurologist, Oncologist, Urologist, Hematologists, Immunologist or any such specialist, as may be prescribed.

16.What is the amount of tax deduction allowed under Section 80DDB?

Tax deduction allowed under Section 80DDB depends on two factors – the age of the patient and the actual amount of expenditure.

The amount can be claimed lower of the following:

• The actual amount being paid for the treatment
• or the sum of Rs. 40,000 /– (in case the patient is Normal citizen)
• or the sum of Rs. 1,00,000/- (aged 60 years or more)

Other Conditions:

• The deductions are always claimed with respect to the actual expenses incurred during the relevant financial year.
• In the case when the dependent is already insured by any insurer or company and some payment is received either from the insurer or by way of reimbursem*nt from his employer- the insurance amount must be subtracted from the deduction allowable. For example, if you are eligible for ₹ 1, 00,000 and you received ₹ 40,000 from the insurance company then you are eligible for ₹ 60,000 deduction under this section.

17.Which disease shall be the eligible to avail tax deduction under Section 80DDB?

Under Section 80DDB, the following diseases or ailments are eligible for tax deduction:

1. Neurological Diseases where the disability level has been certified to be of 40% and above,—
   • Dementia ;
   • Dystonia Musculorum Deformans ;
   • Motor Neuron Disease ;
   • Ataxia ;
   • Chorea ;
   • Hemiballismus ;
   • Aphasia ;
   • Parkinsons Disease ;
2. Malignant Cancers ;
3. Full Blown Acquired Immuno-Deficiency Syndrome (AIDS) ;
4. Chronic Renal failure ;
5. Hematological disorders :
   • Hemophilia ;
   • Thalassaemia.

18.How to claim tax deduction under Section 80DDB? What documents are required?

You can claim the deduction under Section 80DDB at the time of filing ITR.

• There should be proof that the medical treatment is actually being undertaken and the prescription from the doctor stating the person is suffering from any disease specified under Section 80DDB.
• For the same, the prescription given by the specialist doctor is among the most important documents.
• Where the treatment has been received in a government hospital then the prescription may be issued by any specialist working full-time in that hospital and having a PG degree in General or Internal Medicine or equally recognized degree.
• In the case of a government hospital, a prescription should also contain name and address of the government hospital.

19.What is the Prescription Format to receive tax deduction under Section 80DDB?

While it is a must that the prescription from the qualified specialists of the relevant field, the content of the prescriptions should strictly follow the assigned format. Earlier, Form 10-I was required for the same but that has been turned down. In the present case, the following parameters are a must and should be specified in the prescription.

• Name of the Patient
• Age of the Patient
• Name of Disease or Ailment
• The specialist doctor issuing the prescription must specify his/her name, address, qualification and registration number.
• In the case that the treatment is being undertaken in a government hospital, the name and address of the government hospital must be mentioned.
• The form must be signed by the head doctor in the hospital as per the case.

This prescription form is submitted to the income tax department while filing the income tax return. Practically no document is attached with ITR, it is advised to keep a copy of the prescription for future reference.

20.What tax benefit are available under Section 80EEA on buying an affordable house?

This applies to individuals buying a home. You can claim for deduction on interest payment of up to ₹1,50,000 per annum on your housing loan under Section 80EEA, provided you don’t own any other , and subject to conditions prescribed. This deduction is over and above the deduction of ₹2,00,000 per annum for interest amount payments which is available under Section 24 of the Income Tax Act.

21.What are the tax benefits of donating to an NGO under Section 80G?

Section 80G of the income tax provides an income tax deduction to the tax-payers on donations made to charitable institutions and specified trusts / certain funds, etc. This deduction is available to all types of persons (individual, HUF, Company etc)

As per Section 80G, you can claim deductions under two broad categories:

• Donations without an upper limit: 50% or 100% of the total contribution made can be deducted, according to the charitable institution where donation is made, without any other limitation.
• Donations with an upper limit: 50% or 100% of the total contribution can be tax-deductible, in accordance with the charitable organization where the money is donated to. You should note that the amount deducted in this type is limited only to 10% of your gross total income

Mode of payment of donations to avail tax deduction under Section 80G

For amounts up to ₹ 2,000 you can make donations in cash. However for an amount greater than the same, the contribution must be made in the form of cheque, digital payment or demand draft to claim tax benefit.

Documents are required to claim tax deduction under Section 80G

• Receipt of donation – The receipt should provide details like Name, Address, PAN, registration number of the trust & the name of the donor as well as the amount of donation
• 80G Certificate of Trust – You should keep a photocopy of trust’s 80G registration certificate.

If donation falls under 100% deduction category, then Form 58 is a mandatory. The donor should also insist on Form 58 from trust.

22.How much tax deductions can you claim under Section 80GG?

A taxpayer can claim the least of the three below as tax deduction under 80GG:

• Total rent paid minus 10% of adjusted total Income.
• A flat amount of ₹ 60,000 per year or ₹ 5,000 per month

25% of Adjusted total Income ( i.e., Total Income excluding long-term capital gains, short-term capital gains under section 111A and Income under Sections 115A or 115D and deductions under Sections 80C to 80U. Also, income is before making a deduction under section 80GG).

23.How to avail tax benefit under Section 80GG?

Tax benefit under Section 80GG is available to individuals who do not receive House Rent Allowance (HRA) but is paying rent for his/her own stay. To avail this benefit you need to file a declaration with Form 10BA for the rent paid to owner of the house in a financial year by filling up the form and attach the required documents. Maximum amount of deduction that can be claimed under Section 80GG is ₹ 60,000.

24.What tax deductions are available on political party donations under Sections 80GGB and 80GGC?

Section 80GGC– it specifies the deduction under the Income Tax Act which is allowed from the total gross income of specified assesses* for the contributions made to a political party** or an electoral trust.

Section 80GGB-any Indian company or enterprise that donates to a political party or an electoral trust registered in India can claim a deduction for the amount contributed.

*specified assesses means- any person(an individual, a Hindu Undivided Family (HUF), a firm, an AOP or BOI and an Artificial Juridical Person)exceptany local authority or artificial juridical persons who are wholly or partly funded by the government

**The political party receiving the donation must be registered under the Section 29A of the Representation of the People Act, 1951. An electoral trust is a non-profit company created under Section 8 of the Companies Act, 2013

Both individuals and companies can claim deduction on 100% of the amount donated by them to a political party under Section 80GGC and 80GGB respectively.

25.How Sections 80TTA and 80TTB can help you save tax on savings account interest income?

Section 80TTA– Generally, the interest earned from the amount deposited in a savings account is taxable. But, you can claim a tax deduction under Section 80 TTA for up to a maximum amount of ₹10,000 earned as interest on savings bank account or post office for a given year.

Section 80TTB– The right to residentsenior citizens (age should be 60 years or above) to claim a larger deduction of ₹ 50,000 on the interest income earned on deposits. Interest income includes Interest on bank deposits; either savings, recurring or fixed deposits, deposits at the post office, on the deposits held in co-operative society mainly engaged in the business of banking.

26.Who can claim deduction under Section 80U and how much?

Any resident who has been certified by a medical authority as a person with a disability 0f 40% or more can claim tax benefits under Section 80U. The following disabilities are included:

1. Locomotor Disability
2. Mental illness
3. Leprosy
4. Blindness
5. Hearing impairment

The Section also includes severe disability which is considered when a person is suffering from 80% /more or multiple disabilities.

The limit for claiming deduction is as follows:

1. Those suffering from at least 40% of disability are eligible to claim a tax deduction of ₹ 75,000.
2. Those suffering from at least 80 % of a disability or multiple disabilities are eligible to claim a tax deduction of ₹ 1, 25,000.

27.What is a relocation allowance? How is it different from HRA?

If your job requires you to shift to another city, you might be reimbursed for any relocation costs. This reimbursem*nt from you company is termed Relocation Allowance.
This is different from House Rent Allowance (HRA) because it demands larger expenses such as shifting houses, moving goods, finding new schools, etc. There are variations in taxability of different relocation expenses.

28.Is leave encashment taxable as salary?

1. Government Employees-
   Leave encashment is not taxable.
2. For Private Sector Employees-
   Leave encashment is taxable as “Income from salary”. However, certain tax exemptions are provided under Section 10(10AA).
   The exemption is provided as per the lowest of the below-stated amounts:
   Average salary of the last 10
   • The actual amount of leave encashment
   • ₹ 3 Lakh
   • Unutilized earned leave X Average monthly salary
3. If leaves are encash-ed while still working in the company, then the leave encashment is taxable without any exemptions.

29.What is a gift tax?

A ‘gift’ denotes any type of an asset or a property that one receives from someone without providing anything as payment or in return. These could be:

• money/cash
• Immovable property, such as a house or commercial space
• Movable property, such as jewellery or a vehicle

Any gift received by a recipient contributes towards their income for the financial year and is subject to gift tax. However, gift tax might be exempted if:

• Aggregate value of the gift is less than Rs. 50,000
• Gifts Received from Relatives.
• On the Occasion of Marriage of the Individual.
• Gift received by means of a will or inheritance or in Contemplation of death of the payer.
• Gift received as a sum or property from a fund, trust, foundation, university, other educational institution subject to some conditions.

30.I have a sibling who is mentally challenged and totally dependent on me. Is there a provision to claim the expenses to reduce my tax liability?

If you are an Indian resident, and have a dependent with a disability, you can claim tax deductions under Section 80DD. The disability must be certified by a medical doctor.

In case of

• Normal Disability ( i.e. at least 40%) the deduction allowed from gross total income is Rs. 75,000.
• Severe Disability (i.e. 80% or more) the deduction allowed from gross total income is Rs.1,25,000.

Full deduction can be claimed under Section 80DD even if the actual expenses on the said disabled dependant are less than the mentioned amount.

Mental disability is among the listed disabilities covered under 80DD- for others, you must refer to clause (i) of Section 2 by the ‘person with Disabilities Act, 1995.

Read more at: All deductions available for Individuals while filing IT Returns

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