Tax planning seems to be at the helm of all affairs right now. While in our previous article we had explored which are the deductions you must look at under 80-C (Read More); in this article we take a slight detour. 80-C is often viewed as the one stop destination to determine what deductions will applicable to your overall income, but this time we take a look beyond 80-C at six sub-sections to take into consideration before finalizing on your tax planning for the year
The purview under this scheme has expanded for this year; for instance one can get an additional tax benefit of Rs 50,000 if you park money in the scheme, which is now a part of Sec 80CCD. The other benefit that one gets is that one can now invest in the scheme in equity as well.
This scheme allows individuals to invest up to Rs 50,000 in approved stocks, but you will be allowed to claim the benefits only if you are investing for the first time.
The deduction is allowed only on the interest repayment part, not on the principal amount of education loan (meaning that only interest repayment is available for tax deduction while filing income tax return). But the important point to remember here that deduction is over and above the 80C limit and there is no maximum limit on claiming deduction under 80E.
In the Union Budget, Finance Minister Arun Jaitley increased the limit on deduction on home loan interest (under Section 24) to Rs 2 lakhs from Rs 1.5 lakhs earlier. Interest payable on `self occupied' property is subject to a maximum deduction of 2 lakh under the head `Income from house property'. It can be set off against other income, which includes salary income, in the same year—this will eventually reduce your overall tax liability.
Investing in your health will now lead you to save more taxes – by placing your money in an health insurance policy will enable you to save tax up to Rs 25,000 and the limit is extended to Rs 30,000 in case of senior citizens. So, one can go ahead and take a good health insurance policy now!
“The spirit of charity never goes unrewarded”- the adage holds completely true for Section 80G. Under this section of income tax law provides each individual tax benefits on amount donated to NGO's.
Hence remember to plan your investments well in the coming financial year. Happy Investing!