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Income Tax: Opting for old tax slabs? Here are 5 options beyond Section 80C that will help you save money
Finance Minister Nirmala Sitharaman during her Union Budget speech earlier this year announced a new tax regime for India with lower tax rates but no exemptions. She however cleared that those who want to stick to the old income tax slabs can continue to opt for the various benefits listed there.
Finance Minister Nirmala Sitharaman during her Union Budget speech earlier this year announced a new tax regime for India with lower tax rates but no exemptions. She however cleared that those who want to stick to the old income tax slabs can continue to opt for the various benefits listed there. In case you are planning to opt for the older regime, there are several tax saving options you can go for.
Section 80C of the Income Tax Act, 1961 remains one of the most popular tax-saving options and most individuals claim deductions under this section to lower their taxes. It facilitates deductions of up to Rs 1,50,000 per annum. However, there are more tax-saving investments beyond the maximum limit available under Section 80C.
National Pension Scheme (NPS) – Under Section 80CCD, you can invest an additional Rs 50,000 in this scheme apart from the contribution of Rs 1,50,000 available under Section 80C. In short, you can claim a total deduction of up to Rs 2,00,000 in each financial year by investing in NPS.
Interest payment of home loan – The payment of interest part of a home loan is eligible for tax benefit under Section 24 of the Income Tax Act, 1961. In case the property is occupied by the person taking the home loan, the maximum limit under this section is Rs 200,000.
However, if you are not staying in the property and is rented out then there is no maximum limit, allowing you to claim the whole interest amount as a tax deduction.
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Interest payment of the home loan for first-time buyers – You can avail of a tax benefit of Rs 50,000 under Section 80EE if you are a first-time homeowner. This amount is the above the tax deduction of Rs 200,000 that can be claimed for home loan interest repayment under Section 24. The criteria to avail of this deduction are that the total value of the house should be below Rs 50 lakhs, and the loan amount should be ₹35 lakhs or less. Furthermore, the home loan should have been sanctioned between 1st April 2016 and 31st March 2017.
Interest payment of the home loan for first-time buyers– If you are a first-time homeowner then you can claim a deduction of up to Rs 150,000 under Section 80EEA. This amount is above the tax benefit of Rs 200,000 for repayment of home loan interest under Section 24. The criteria to avail of this deduction are that the stamp duty value of the house property should be below Rs 45 Lakhs. Furthermore, the home loan should have been sanctioned between 1st April, 2019 and 31st March, 2020.
Interest paid on loan taken for the purchase of an electric vehicle – Under Section 80EEB, you can claim a tax deduction of up to Rs 1,50,000 for the interest repayment for a loan taken for the purchase of an electric vehicle. To be eligible, the loan should have been sanctioned between 1st April 2019 and 31st March 2023.
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