Options for tax-saving extend beyond Section 80C. Find out the major deductions and advantages for FY 2023-24, like NPS contributions, health insurance premiums, medical expenses, home loan interest, electric vehicle purchases, charitable donations, savings account interest and tax rebates. These deductions reduce taxable income and tax liability, furnishing a chance for significant savings.
I-T Section 80CCD(1B) for Contributions Made to NPS
By investing up to Rs 50,000 in NPS the taxpayers can save the additional tax. The same is over and above advantageous they could claim on contributions under Section 80C. They have the option of using NPS for the Rs.1,50,000/- limit of Section 80C. The same combination will take the total deduction one can claim with NPS to Rs. 2,00,000/-
The NPS retirement savings are beneficial for a person who wants the plan for their post-retirement life. The scheme comes up with numerous conditions and terms which apply to tax investments made in Tier I accounts. One of these requirements is that the scheme gives the majority when you turn 60 years old. Cancellations before this age are permitted only under particular circumstances.
As, the Tier II Account offers the biggest adaptability, as withdrawals are permitted without any constraint. It is very necessary to keep this differentiation in mind when you need to invest in the NPS scheme.
I-T Savings U/S 80D Tax on Health Insurance Premiums
Calculating the taxpayer’s total income, being an individual or a Hindu undivided family, there will be deducted such sum as mentioned in sub-section (2) or sub-section (3), payment of which is incurred via any mode as defined in sub-section (2B), in the previous year out of his income levied to tax.
Where the taxpayer is an individual, the sum directed to in sub-section (1) will be the aggregate of the following, like-
- (a) The amount paid to effect or to keep in force an insurance on the health of the taxpayer or his family or any contribution made before the Central Government Health Scheme or these additional schemes as may be declared by the Central Government on this behalf or any payment made on account of preventive health check-up of the assessee or his family as does not surpass in the aggregate Rs. 25,000/- (twenty-five thousand rupees)
- (b) The amount filed to effect or to keep in force an insurance on the health of the parent or parents of the assessee or any payment made for preventive health check-up of the parent or parents of the taxpayer as does not surpass in the aggregate Rs. 25,000/- (twenty-five thousand rupees).
- (c) The amount paid on account of medical expenditure made on the health of the taxpayer or any member of his family does not surpass the aggregate 50,000/-(fifty thousand rupees).
- (d) The amount filed for medical expenditure made on the health of any parent of the taxpayer does not surpass the aggregate Rs.50,000/- (fifty thousand rupees).
Read Also: Quick Guide to Section 194-IA with 1% TDS on Property Sale
I-T Deduction U/S 80EEB for Electric Vehicle on Interest
Interest is liable to get paid on a loan taken by an individual from any financial institution for the purchase of an electric vehicle as per specific conditions. Under the same section, the deduction will not surpass 1,50,000.
Section 80G for Donations to Charitable Institutions
Donations incurred before the government-approved charitable institutions could be claimed as a deduction under the same section. Certain funds approved by the government comprise the National Defence Fund, Prime Minister’s National Relief Fund, Clean Ganga Fund, National Children Fund, etc.( two categories of deduction are there 50% and 100%)
Note: Under the same section no deduction will be permitted concerning the donation made in cash surpassing ₹ 2000
Section 80DD for Tax Savings on Medical Expenses Caring for Disabled Dependent
The taxpayer u/s 80DD is qualified to claim the deduction of Rs. 75,000/-( available for a person with Disability, irrespective of expense made) from his gross total income. But, in case the dependant is a person with severe disability, the taxpayer is qualified to avail a deduction of Rs.1,25,000/-( if the person has Severe Disability (80% or more).
Section 80DD and Section 80DDB are two different sections of the I-T Act that provide tax deductions for medical expenses. As they vary in the maximum deduction of the tax amount can be claimed. Under the Section of 80DDB, normal patients and senior citizens are qualified to claim a maximum tax deduction amount of INR 40,000 and INR 1 lakh, separately. Section 80DD gives a higher tax deduction amount of INR 75,000 for normal disability and INR 1.25 lakh for severe disability.
To claim tax deductions related to incapacity, you need a valid disability certificate issued by medical authorities. If you relate to who suffers from autism, cerebral palsy, or multiple disabilities, you must have to submit the Form 10-IA. This form is signed by a qualified medical tax professional, such as a neurologist, pediatric neurologist (if the dependent is a child), civil surgeon, or chief medical officer.
The documentation is required to make sure that the tax deductions are being claimed correctly and in tax compliance with the relevant rules.
Tax Rebates Under Section 87A
In the case of an individual resident in India, the tax rebate whose total income does not surpass Rs 5,00,000 quantum of rebate shall be equal to a hundred per cent of such income tax or an amount of Rs. 12,500, whichever is less.
The tax rebate amount under section 87A for the FY 2021-22 and 2022-23 has been remain same for the both the old and new income tax regimes. With the introduction of new slab rates under the NTR, the tax rebate limit will be revised starting from the financial year 2023-24.
If a person has a taxable income of up to INR 5,00,000, they are eligible for a tax rebate under the OTR. However, under the NTR, an individual with a taxable income of INR 7,00,000 will now qualify for a tax rebate as a resident taxpayer.
Section 80EE Tax Deduction on Interest Loan Taken for Residential House Property
U/s 80EE the tax advantage could merely be claimed by first-time home buyers. To avail of the same deduction the individual should opt for a loan from the financial institution to buy his/her residential house property. Section 80EE is applicable on a per-person basis rather than on a per-property basis. Under the same section, the deduction will not surpass Rs 50,000 (on the interest paid on the loan taken).
Section 80TTA / 80TTB for Interest on Saving Bank Accounts
Interest on deposits in savings bank accounts will not surpass Rs 10,000 per year. It will not be more than Rs. 50,000 per year for Senior citizens.
Closure: Beyond Section 80C leveraging tax-saving options could substantially diminish the tax obligations for FY 2023-24. By exploring deductions on NPS, health insurance premiums, medical expenses, home loan interest, electric vehicle purchases, charitable donations, savings account interest, and tax rebates, people can make their tax planning strategies effective.
Through the way of understanding and using such advantageous options you can increase your tax savings to the highest. If you’re looking for more ways to save on your income tax then SAG Infotech’s Gen Income Tax Software will help you. It offers tax deductions under various sections such as 80G, 80C, 80CC, and 80DD. Additionally, you can also benefit from tax rebates under section 87A. With this choice at your disposal, you can effectively reduce your income tax liability.
