Section-Based Income Tax Saving Tips For Salaried Person

All salaried persons don’t know about all sections under income tax that can save income tax on a legal basis. Here, SAG Infotech has written down all income tax saving tips along with the simple definition of all related sections like 80C, 80CCC, 80CCD, 80TTA, 80GG, 80E, 80EEA, 80EEB, 80D, 80DD, 80DDB, etc.

If a salaried individual has more than Rs 2.5 lakh annual income then he is liable to pay taxes to the government timely. But by investing in various financial instruments a salaried individual can get a rebate in taxes and save his/her hard-earned money. These income tax saving benefits are available under the Act. The benefits of tax rebates can be availed by investing in different financial instruments such as Small Savings Schemes, NPS, Loans, Donations, Treatment of Parents, Insurance, Child Fees and more.

Here we are going to tell you about the 13 different sections of the Income Tax Act, along with the provisions of tax exemptions mentioned in them.

Income Tax Section 80C for Several Saving Schemes

Section 80C is one of the popular sections of the Income Tax Act where you can get income tax saving tips by investing the maximum amount of Rs 1.5 lakh. Under section 80C, you can invest money in Life Insurance, ELSS, EPF Contribution, Annuity Plan, Small Savings Scheme, Sukanya Samriddhi Yojana, Ulip, National Pension Scheme, National Bank for Agriculture and Rural Development (NABARD) Bonds, Payment of Home Loans, school/tuition fees, etc.

Income Tax Saving By Section 80CCC from Insurance Policies

Under Section 80CCC, an individual can save taxes by investing in an annuity plan for insurance policies The plan must provide a pension amount after a particular time duration. The pension comes from the annuity plan or receiving the interest/ bonus amount when quitting the annuity plan. Both, pension amount and bonus amount come under the purview of tax.

Section 80CCD Helps IT Saving Under Pension Schemes

Section 80CCD (1)

• Under this section, a salaried employee can save taxes by submitting the 10 per cent amount of his salary in the pension account. The maximum limit of Rs 1, 50,000 is available under this.

New Section 80CCD (1B)

• Through Section 80CCD (1B), Salaried employees can get the additional tax benefit by depositing the money in the NPS account. Under this, the maximum limit is Rs 50,000

Section 80TTA Related to Saving Account in Any Bank

An interest of up to Rs 10000 has been exempted under Section 80TTA of the Income Tax Act. You can save income tax by opening a savings account in any bank, post office or cooperative society. A member of HUF (Hindu Undivided Family) or a person can avail of this benefit. If in case, you have earned interest through FD, RD or Corporate Bonds, these have not been exempted from tax.

Income Tax Saving By Section 80GG from House Rent Allowance

House Rent Allowance (HRA) is a sub-component of salary. If in case a salaried employee is not receiving the HRA from the employer’s side then they can claim the tax deduction by providing the rent bill. Furthermore, the taxpayer his wife or a minor child can avail of this benefit under Section 80GG of the Income Tax Act but the condition is that they have their own residential property

• A person can get the tax rebate lowest of these:-
• Actual Rent Minus 10 per PerCent of the Total Income
• 25 Percent of the Total Income
• Rs 5,000 per month

Section 80E Helps in IT Savings Related to Educational Loans

An individual can take a loan for higher education and on such loans, an individual can avail of the benefits of income tax deduction under section 80E. Children, wives, or any of the students can take the loan but the taxpayer is a legal guardian of them. The benefit of tax exemption can be available only for the tenure of 8 years after then the interest is charged.

Section 80EEA Interest Paid on Affordable Housing Mortgages

As a result, a fresh provision, Income tax section 80EEA has been introduced to facilitate an interest deduction starting from the Assessment Year 2020-21. The previous provision under Section 80EE permitted a deduction of up to Rs 50,000 for interest payments made by 1st-time homebuyers on loans between April 1, 2016, and March 31, 2017, sanctioned by financial institutions.

Section 80EEB Tax Benefits an Electric Car

Under Section 80EEB of the Income Tax Act, you can avail of tax benefits of up to Rs 1.5 lakh on the interest paid for a loan taken exclusively for purchasing an electric vehicle. However, specific constraints and criteria regarding the loan provider and the electric car must be adhered to for claiming the 80EEB deduction. Tax deduction advantages can be claimed only if the loan is sanctioned between 1st Jan 2019, and 31st Mar 2023.

Tax Saving Tips Via Section 80D Related to Health Insurance

Apart from the section Section 80C of HUF, an individual can get the benefits of a tax deduction of up to Rs 25,000 on making health insurance for a wife, children or parents under Section 80D.

• If in case your parent’s age is more than 60 years you can avail of the tax benefits of up to Rs 50,000 along with Rs 25,000.
• If in case the taxpayer as well his parent’s age is more than 60 years then under section 80D via insurance premium he can get the tax exemption benefits of up to Rs 1 lakh.

Income Tax Saving By Section 80DD Related To Medical Treatments

Section 80DD of the Income Tax Act provides relaxation to Resident Individuals or HUFs on medical treatment. The benefit is provided only to differently-abled and– is wholly dependent people. Tax benefits are to be allowed when the below conditions are satisfied:-

• Rs 75,000 when the disability is more than 40% and less than 80%
• Rs 1,25,000 in a case when the disability is more than 80%
• To claim tax exemptions, it is necessary to get a disability certificate from an authorized medical authority.
• The tax exemption is to be allowed only to a dependent person of the taxpayer and not to the taxpayer himself

Section 80DDB Related to Medical Treatments

Under Section 80DDB of the Income Tax Act, an individual can claim up to Rs 40,000 in respect of a certain disease for medical treatment purposes. The taxpayer can claim for himself or any of the dependent family members.

In the case of the medical treatment of the Senior Citizen, tax exemptions of Rs. 1 lakh can be waived on medical expenses. To get the tax rebates on medical expenses, you have to show the medical treatment bill of this.

However, if the cost of the medical treatment has been compensated either by the insurance or the employer, then after the deduction of this amount the tax will be subtracted from the remaining expenditure of the medical treatment.

Section 80U Related to Physical Illness

If any of the people are physically or mentally disturbed/ retarded then under Section 80U of the Income Tax Act he can get tax benefits of up to Rs 75,000. Blindness also comes under this section. In case of serious physical illness, a tax exemption of up to Rs 1.25 lakh can be availed.

IT Saving via Section 80G Related to Donation

Under Section 80G, you can avail the income tax exemptions on charity and donations to an organization. In some cases, you can get a 100 per cent tax exemption, while in some cases you can avail of 50 per cent. However, in cash mode, you won’t get the benefits of more than Rs 2000.

Section 80TTB for Senior Citizens

Section 80TTB is particularly for senior citizens, Under this section interest on deposits of up to Rs 50000 is exempted from tax.

Above we have described all the income saving sections which are being frequently used by salaried professionals in the income tax paying time period. For further savings, you can also file your income tax return filing with the help of Gen income tax return filing software available with multiple features at an affordable price.