Tax Important News: If you want to save income tax, then you have time only till March 31. By investing money in many investment schemes like NPS, ELSS and PPF, you can save tax for the financial year 2024-25. These especially include those people who are following the old tax regime. This is a good opportunity for them to reduce the tax burden by investing at the right time.
How can you save tax?
Under Income Tax, there are many sections where you can get exemption on investments or expenses. Some of the most popular options are:
Section 80C: Exemption up to Rs 1.5 lakh
- In this section, you can get tax exemption up to Rs 1.5 lakh annually on select investments. These include:
- Employees Provident Fund (EPF) – Retirement Saving Scheme
- Public Provident Fund (PPF) – Long-term investment with a lock-in period of 15 years
- National Savings Certificate (NSC) – Saving scheme with a maturity of 5 years
- Tax Saving Fixed Deposit – Bank FD with a lock-in period of 5 years
- Equity Linked Savings Scheme (ELSS) – Mutual Fund with a lock-in period of 3 years
- Life Insurance Premium – Discount on premium of life insurance policy
- Sukanya Samriddhi Yojana (SSY) – Saving scheme for daughter’s future
- Tuition Fees – Expenses on children’s education
- Home Loan Principal Repayment – Discount on payment of principal of home loan
Section 80D: Deduction on health insurance premium
If you have taken health insurance for yourself or your family, then you get tax exemption on it too.
- For yourself, wife and children – up to Rs 25,000
- If parents are senior citizens – up to Rs 50,000
- For preventive health checkup – additional deduction of up to Rs 5,000
Section 80E: Deduction on education loan
If you have taken an education loan for higher studies, then you get deduction on its interest without any limit. This deduction is available for 8 years after starting loan repayment.
Section 80EE and 80EEA: Additional deduction on home loan
Under 80EE, first time homebuyers get additional deduction of up to Rs 50,000.
Under 80EEA, home loan borrowers for affordable housing get an additional deduction of up to Rs 1.5 lakh.
Section 80G: Tax exemption on charity
If you have donated to a recognized charity or relief fund, then you get a tax exemption of 50% to 100%.
Section 80GG: Exemption on rent (if HRA is not available)
If your salary does not have house rent allowance (HRA), then you can get a deduction of up to Rs 60,000 on the amount paid on rent.
Section 24(b): Exemption on home loan interest
If you have bought a house for your own residence, then you will get a deduction of up to Rs 2 lakh on the interest of the home loan.
If the house is given on rent, then there is no limit on this.
National Pension System (NPS): 80CCD(1), 80CCD(1B), 80CCD(2)
- 80CCD(1) – Investments made in NPS are eligible for deduction up to 10% (20% for self-employed individuals), but this is included in the 80C limit.
- 80CCD(1B) – NPS offers an additional deduction of up to ₹50,000.
- 80CCD(2) – If the employer contributes to NPS, it offers an additional deduction of up to 10%, which is separate from the 80C limit.
Section 80TTB: Exemption for senior citizens
If you are a senior citizen, you can get a rebate of up to Rs 50,000 on interest income from savings account, FD or post office deposit.
No opportunity after March 31
The last day of the financial year 2024-25 is March 31. After this, the Income Tax Return (ITR) filing season will start from April 1. Salaried persons will be issued Form 16 by their employers, which will contain complete details of their income and tax deduction. If you want to take advantage of the old tax regime, then this is the last chance to save tax by investing in these schemes before March 31.