Know how to save money and slash your tax outflow

Know how to save money and slash your tax outflow

A majority of people invest in medical and life insurance policies, Provident Fund schemes and mutual funds, among others, to save tax. It may, however, be surprising to know that our Income Tax Act also allows tax benefits in respect of certain expenses incurred by an individual taxpayer. However, in order to claim this benefit, it is necessary that the amount is spent in the same financial year. Which are these expenses? Here is a list of some of such expenses:

Tuition fees

Incurring expensive tuition fees for your children? Don’t worry! Tuition fees paid to any university, college, school or other educational institution situated in India, whether at the time of admission or thereafter, are eligible for deduction under Section 80C of the IT Act. The tuition fees paid for up to 2 children can be claimed under this Section. The fees should be paid in connection with full-time education of the children and should exclude any development fees or donations or payment of similar nature. The benefit is subject to the ceiling of Rs 1,50,000.

Medical treatment of a dependent person with disability

If you have incurred any medical expenditure on the treatment of a dependent family member (i.e. spouse, children, parent, brothers and sister) suffering from specified disabilities, a deduction can be claimed under Section 80DD of the IT Act. The deduction is limited to Rs 75,000 under this Section, and if the dependent is suffering from severe disability, deduction up to an amount of Rs 1,25,000 is available. The deduction under this Section is only available to resident individuals. In case the resident individual himself is suffering from the disability, the above-mentioned amounts are eligible for deduction under Section 80U.

Medical treatment of specified diseases

In case a resident individual has incurred expenditure in connection with treatment of any specified diseases or ailments and has obtained prescription for such treatment from a specified medical specialist, the same can be claimed as a deduction subject to a maximum ceiling of Rs 40,000 as per Section 80DDB of the IT Act. The ceiling shall be Rs 60,000 in case the patient is a dependent senior citizen (i.e. above 60 years) and Rs 80,000 if he is a very senior citizen (i.e. above 80 years).

Interest on loan for higher education

An education loan, apart from funding the careers of aspiring individuals, offers tax benefits also. If you are repaying the installments of a loan taken for pursuing higher education for yourself or your relative (i.e. spouse, children or a student to whom you are a legal guardian), then the interest component shall be entitled to a deduction under Section 80E of the IT Act. The deduction under this Section starts from the year in which the payment of interest on loan is initiated and it continues up to 8 years or up to the year in which the loan is repaid, whichever is earlier. The loans should have been availed from a financial institution or any approved charitable institution for the purpose of higher education.

Principal repayment and interest on loan for residential house property

Taken a loan for buying a residential house in the financial year 2016-17? Home buyers can claim a tax deduction of the interest paid on such loan, subject to a maximum amount of Rs 50,000 under Section 80EE of the IT Act. The value of the house property should not exceed Rs 50 lakh and the amount of loan sanctioned should not exceed Rs 35 lakh. The benefit under this Section can be claimed only by individuals. In case the home buyer owns more than one residential house property on the date of sanction of the loan, benefit under this Section shall not be available.

The principal repayments of such loans can be claimed under Section 80C within the prescribed limit of Rs 1,50,000. This deduction is also applicable on stamp duty, registration fees and transfer expenses incurred in connection with the purchase of house property.

Deduction in respect of rent paid

In case your salary does not include a house rent allowance, then you are eligible to claim deduction of the rent expenditure incurred during the year under Section 80GG of the IT Act to the extent of lower of the following:

# Rent expenditure in excess of 10% of total income;

# 25% of the total income; or

# Rs 5,000 per month.

In order to claim benefit under this Section, it is necessary that no residential accommodation is held by you or your spouse or a minor child at the place where you ordinarily reside or carry out your business or profession.


Certain specific donations are eligible for a deduction under Section 80G of the IT Act. While some specified donations are eligible for 100% deduction, some are eligible for 50% deduction.

Also, deduction for certain donations (whether eligible for 100% or 50% deduction) is available only to the extent of 10% of the adjusted total income, as defined under the IT Act.

Further, in order to claim deduction in respect of donation exceeding Rs 10,000, it should be paid by any mode other than cash.

Please note that the above deductions are available subject to obtaining/furnishing of requisite documentary evidences as prescribed under the relevant provisions of the IT Act. Before claiming any deduction, it is advisable to confirm with your consultant about the eligibility of the expenditure incurred.


Source by financialexpress..

Comments (26)

  • minecraft

    Hmm it appears like your website ate my first comment (it was super long) so I guess I’ll just sum it
    up what I had written and say, I’m thoroughly enjoying your blog.
    I as well am an aspiring blog blogger but I’m still
    new to the whole thing. Do you have any points for first-time
    blog writers? I’d really appreciate it.

  • minecraft

    Hello, the whole thing is going nicely here and
    ofcourse every one is sharing data, that’s genuinely fine, keep
    up writing.

  • minecraft

    Have you ever considered about adding a little bit more
    than just your articles? I mean, what you say is fundamental and
    all. But imagine if you added some great graphics or videos to give your posts more, “pop”!
    Your content is excellent but with images and video clips, this site could definitely be
    one of the greatest in its niche. Fantastic blog!

  • minecraft

    Your method of explaining everything in this piece of writing is truly nice, every one can simply be aware of it, Thanks a lot.

  • minecraft

    With havin so much content do you ever run into any issues of
    plagorism or copyright infringement? My website
    has a lot of exclusive content I’ve either
    written myself or outsourced but it appears a lot of it is popping it up all over the web without my permission. Do you know any ways to help reduce content from being
    ripped off? I’d really appreciate it.

  • minecraft

    Simply desire to say your article is as astonishing.

    The clarity in your post is just spectacular and i can assume you’re an expert on this subject.
    Fine with your permission allow me to grab your RSS feed to
    keep updated with forthcoming post. Thanks a million and please carry on the rewarding work.

  • minecraft

    Pretty nice post. I just stumbled upon your weblog
    and wanted to say that I have really enjoyed browsing your blog posts.
    After all I will be subscribing to your rss feed and I hope you
    write again very soon!

  • minecraft

    An impressive share! I’ve just forwarded this onto a
    friend who was doing a little research on this. And he
    in fact ordered me breakfast simply because I discovered it for him…
    lol. So allow me to reword this…. Thanks for the meal!!
    But yeah, thanks for spending some time to discuss this matter here on your
    web page.

  • minecraft

    It’s not my first time to pay a visit this web page, i am
    browsing this site dailly and obtain fastidious information from
    here all the time.

  • minecraft free download 2018

    Greetings! Very useful advice in this particular article!
    It is the little changes that make the most significant changes.

    Thanks for sharing!

  • minecraft free download 2018

    Thanks designed for sharing such a pleasant opinion, paragraph is good,
    thats why i have read it entirely

  • minecraft free download 2018

    Excellent blog here! Also your web site loads up very fast!

    What host are you using? Can I get your affiliate link to your host?
    I wish my site loaded up as fast as yours

  • minecraft free download 2018

    Thanks for sharing your thoughts. I really appreciate your efforts and I will be waiting for
    your next post thank you once again.

  • minecraft free download 2018

    Hello there, I found your blog by way of Google even as searching for a similar subject,
    your web site came up, it appears to be like great.
    I have bookmarked it in my google bookmarks.

    Hi there, just turned into alert to your weblog through Google, and located that it is really informative.

    I’m going to watch out for brussels. I will be grateful if
    you happen to proceed this in future. A lot of other folks will be benefited out of your writing.


  • minecraft free download 2018

    Howdy! Do you use Twitter? I’d like to follow you if that
    would be okay. I’m definitely enjoying your blog and look forward to new updates.

  • minecraft free download 2018

    I’m now not sure the place you’re getting your information, but great topic.
    I must spend a while learning more or figuring out more.

    Thanks for fantastic info I used to be in search of this information for my mission.

  • minecraft free download 2018

    If you want to grow your knowledge only keep visiting this site and be updated with the most up-to-date information posted here.

  • tinder dating site

    First of all I would like to say great blog! I had a quick question that I’d like to ask if you don’t mind.
    I was interested to find out how you center yourself and clear your head prior to writing.
    I’ve had difficulty clearing my mind in getting my
    ideas out there. I do enjoy writing but it just seems like the first 10 to 15 minutes are usually lost just trying to figure out
    how to begin. Any recommendations or tips? Kudos!

  • tinder dating site

    When someone writes an paragraph he/she maintains the plan of a user in his/her mind that how a user can understand it.
    Thus that’s why this paragraph is great. Thanks!

  • minecraft secret free download

    Greetings from Carolina! I’m bored to death at work so I decided to check out your website on my iphone during lunch break.

    I really like the knowledge you present here and can’t wait to take a look when I get home.
    I’m amazed at how fast your blog loaded on my cell phone ..
    I’m not even using WIFI, just 3G .. Anyhow, excellent blog!

  • minecraft secret free download

    Very energetic post, I liked that bit. Will there be a part 2?

  • Coconut Oil Benefits

    Have you ever thought about adding a little bit more than just
    your articles? I mean, what you say is fundamental and all.
    Nevertheless think of if you added some great graphics or video clips to give your posts
    more, “pop”! Your content is excellent but with images and video clips, this blog could undeniably be
    one of the very best in its niche. Excellent blog!

  • Health Benefits of Coconut Oil

    I am really pleased to glance at this website posts which contains
    lots of useful data, thanks for providing these
    kinds of data.

  • What Equipment is Needed for Sling TV

    Good replies in return of this matter with genuine arguments and telling all regarding that.

  • Sling TV

    Heya! I just wanted to ask if you ever have any problems with hackers?
    My last blog (wordpress) was hacked and I ended up losing a few months of hard work due to no
    data backup. Do you have any methods to protect against hackers?

Leave a Reply