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In order to encourage savings, there are some tax reliefs government offers to private and public sector employees.
To get a clearer idea of what documents you will require to show as proofs of investment, here’s a list (prepared by bankbazaar.com) of items that give you tax exemption from paying tax:
Section 80C: You can claim a maximum cumulative amount of Rs 1.5 lakh under Section 80C.
The following items are included under Section 80C
• Investment in Public Provident Fund (PPF)
• Contribution to Employees Provident Fund (EPF)
• Investment in National Savings Certificate (NSC)
• Premium payment for life Insurance policies
• School fees of children
• Repayment of Home loan principal
• Investment in Sukanya Samriddhi Scheme
• Investment in Unit-linked Insurance Plans (ULIPs)
• Investment in Equity Linked Savings Scheme (ELSS)
• Deferred annuity plan purchase
• Investment in 5-year Fixed Deposit scheme
• Senior Citizens savings scheme
• Contribution to notified securities/deposits scheme
• Subscription to notified pension funds set up by Mutual Fund or UTI.
• Investment in term deposit schemes of the National Housing Bank
• Contribution to term deposit schemes of a public sector or housing finance company
• Investment in notified LIC annuity plans
• Investment in equity shares/debentures of an approved eligible issue
• Subscription to notified bonds of NABARD
Section 80CC: This refers to investment in annuity plans of LIC or other insurers for pension, from a fund referred to in Section 10 (23AAB).
Section 80CCD: This includes contribution to National Pension Scheme accounts.
The following exemptions apply to NPS
• Employee’s contribution to NPS, a maximum of Rs. 1 lakh
• Employer’s contribution to NPS, a maximum of 10% of the salary
• Up to Rs 50,000 additional contribution to NPS
Section 80CCG: For investments in equities, through Rajiv Gandhi Equity Scheme, you can claim up to 50% of the amount invested in equity shares or Rs 25,000, whichever is lower.
Section 80D: Payments made towards medical insurance for self, spouse and children will get you deductions up to Rs 25,000, while medical insurance for parents aged over 60 will get you deductions up to Rs. 30,000.
Section 80DD: If you are spending for medical treatment or maintenance of physically challenged persons, the following exemptions apply:
• 40% to 80% disability – Rs 75,000
• More than 80% disability – Rs 1,25,000
Section 80DDB: If you are treating yourself or a dependent relative for any of the diseases specified in Rule 11DD (which includes neurological diseases, malignant cancers, AIDS, chronic renal failure and haematological disorders), then you can claim the following deductions:
• For people aged below 60: Up to Rs 40,000
• For people aged between 60 to 80: Up to Rs 60,000
• For people aged above 80: Up to Rs 80,000
Section 80E: Interest paid on education loan for self, spouse or children, for a maximum period of 8 years, can be claimed under this section.
Section 80EE: If you are a first-time house owner, you can claim exemption on interest paid on home loan.
Section 80G: Donations to charity and social causes come under this section. A maximum of Rs. 10,000 is exempted from tax.
Section 80GG: In case House Rent Allowance (HRA) is not part of your salary, you can claim not more than 25% of the annual income.
Section 80GGC: If you have made any contributions to political parties through cheque or other traceable means and not cash, you can claim exemption from tax on the given amount.
Section 80RRB: You can claim tax deduction on up to Rs 3 lakh if any part of your income comes from royalty of a patent.
Section 80TTA: Up to Rs 10,000 interest income from savings account is exempt under this section.
Section 80U: If you are physically or mentally challenged, you can claim exemption between Rs 75,000 to Rs 1.25 lakh depending on the severity of the disability.
Make sure that you file your ITR on time – that is, no later than July 31. Filing ITR will ensure that you are adhering to the country’s rules and also taking advantage of all the tax exemptions provided to you by the government.
