National Pension Scheme (NPS)-80CCD(1B)
If you are or plan to open an account in the NPS or National Pension System, Section 80CCD(IB) helps in saving money on taxes. This is yet another way to reduce your taxable income by investing in a tax-saving scheme up to a maximum of Rs 1.5 lakh per year. Except for members of the armed forces, all private and public sector employees are eligible for the NPS, a social security programme run by the federal government. Additional deductions of up to Rs 50,000 are available to taxpayers who are either employed or self-employed. The deduction under Section 80CCD(1B) is in addition to the deduction available under Section 80CCD(1), i.e. Section 80C, despite the fact that the same amount cannot be claimed under both sections.
Rent Paying - Section 80GG
The House Rent Allowance (HRA) is a tax break for salaried employees who live in rented housing and are able to use it to reduce their tax burden. Those who are self-employed or salaried but do not receive HRA as part of their pay but instead pay rent can take advantage of tax breaks under Section 80GG. Rent paid by these taxpayers is deductible from their taxable income. The portion of a worker's salary that is designated as HRA is deducted from the worker's taxable salary under the income tax act. However, if an employee does not live in a rental property, HRA is completely taxed.
Premium of Health Insurance-Section 80D
You need health insurance for everyone in your family, whether it's through an individual plan or a Family Floater. Tax breaks are used by the government to encourage people to purchase health insurance. Even if you pay a premium for your parents, you can claim the deduction. Under Section 80D of the Indian Income Tax Act, health insurance premiums and health care expenses can be deducted from taxable income for tax purposes. You, your spouse, and your dependent children are eligible for a tax deduction of up to Rs 25,000 per financial year under this section. If a senior citizen's medical insurance premium is paid, they are eligible for an additional deduction of Rs 25,000. If both the individual taxpayer and the parent are over the age of 60, they can each claim a deduction of up to Rs 1 lakh.
Interest Payment of Home Loan-Section 24
Section 80C allows for a deduction of up to Rs 1.5 lakh for the principal portion of an in-home loan EMI, while Section 24 allows for a deduction of up to Rs 2 lakh for the interest portion. Section 24 of the tax code allows taxpayers who have mortgages to deduct the interest they pay on those housing loans. Only if the home is occupied within five years of the loan's closing date can the tax benefit be claimed.
Repayment of Education Loan - Section 80E
The use of student loans to help pay for college has become quite common in recent years. When used to further one's education, student loan interest can be deducted from one's taxable income. Section 80E of the tax code allows students who have borrowed money for college to deduct the interest they pay. Depending on who is responsible for paying the student's education loan, this benefit is available to either parent or student. To get this, you'll need to take out a loan from an institution, not a friend or family member.
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