Hidden Tax Deductions: As tax season approaches, most Indian citizens scramble to optimize their assessed investment funds. Whereas findings like Segment 80C are broadly known, there are a few covered-up diamonds that numerous citizens neglect.
These lesser-known findings may assist you in sparing noteworthy sums on your charge, making a genuine distinction in your accounts.
This article will investigate 10 tax-saving openings you might not have known and nearby viable cases to direct your claims. Let’s plunge into these often-overlooked derivations and see how they can advantage you.
1. Tax Deductions on Donations to Charitable Institutions
Did you know that gifts to particular charitable organizations qualify for assessment conclusions beneath Segment 80G? This finding is more fulfilling since your sum can diminish your assessable salary, depending on the institution and the gift sort. Contributions to recognized bodies like the Prime Minister’s National Relief Fund can provide 100% deductions, while others may provide 50% deductions.
Learn more about Section 80G on Income Tax India.
Consider donating to GiveIndia for tax-saving purposes
Example: You donate ₹10,000 to a registered NGO eligible for a 50% deduction. You can claim ₹5,000 as a tax-saving deduction!
2. Interest on Home Loans for Renovation (Section 80E)
Most are familiar with the home loan principal deduction under Section 80C, but did you know you can also claim tax benefits on the interest paid for home renovations? This deduction is under Section 80E, applicable on loans taken for renovation or improvement of the property.
Explore home loan tax benefits with HDFC.
Check out tax-related insights on home loans from TaxGuru.
Example: If you take a loan of ₹2,00,000 for house repairs, the interest paid on the loan is eligible for tax deduction. It can help reduce your taxable income, especially if you’ve made significant home improvements.
3. Tax Deductions for Education Loans (Section 80E)
Education loans help you invest in your future and offer you tax relief. The interest paid on loans for higher education Under Section 80E is fully deductible. It applies to loans for you or your family members, including children and spouses.
For education loan options, visit SBI Education Loan.
Find more about tax deductions for educational expenses on Policybazaar.
Real-Life Scenario: You’ve borrowed ₹5,00,000 for your child’s medical studies abroad. If the interest on this loan is ₹50,000, you can deduct the entire amount of Rs. ₹50,000 from your taxable income, year after year, for up to 8 years!
4. Deduction for Electric Vehicles (Section 80EEB)
To reduce pollution and promote sustainable transport, the Indian government now provides deductions for interest paid on loans taken to purchase electric vehicles (EVs). Under the 80EEB Section, you can claim a deduction for interest paid up to ₹1,50,000 annually.
Learn about electric vehicle loans with Tata Capital.
Check out more on India’s green transport policies at the Ministry of Heavy Industries.
Example: You take a loan of ₹10,00,000 to buy an electric car. If your annual interest payment is ₹60,000, you can claim the entire ₹60,000 as a deduction under Section 80EEB.
5. Tax Deductions for Rent Paid (Section 80GG)
If you don’t receive a House Rent Allowance (HRA) but still pay rent, you can claim a deduction under Section 80GG. This deduction is up to ₹5,000 per month or 25% of your total rent income, whichever is lower.
Explore rent-related tax-saving strategies on LegalRaasta.
Find housing options and tax tips on MagicBricks.
Example: If you earn ₹50,000 per month and pay ₹15,000 in rent, you can claim a deduction of ₹5,000 per month under Section 80GG, saving ₹60,000 annually!
6. Medical Insurance Premiums (Section 80D)
While numerous citizens know about the benefits of therapeutic protection, a few still underestimate how much they can save. 80D Section allows you to claim deductions on premiums for health insurance policies for yourself, your spouse, children, and even your parents.
Check out insurance options from ICICI Prudential Health Insurance.
Learn more about health tax savings on Mediclaim.
Example: If you pay ₹20,000 annually for your health insurance and another ₹25,000 for your parent’s policy, you could save up to ₹45,000 in tax deductions under Section 80D!
7. Tax Deductions for Income from Rural Agricultural Property (Section 10(1))
If you earn income from agricultural activities on land situated in rural areas, this income is exempt from taxation under Section 10(1). It can significantly relieve taxpayers involved in farming or agricultural ventures.
Find more information on agricultural tax exemptions at NABARD.
Learn more about agricultural policies on ICAR.
Example: If you earn ₹2,00,000 from selling crops grown on your rural farmland, you are not required to pay tax on this income.
8. Tax Benefit for Disabled Dependents (Section 80DD & 80DDB)
If you have a debilitated family part, arrangements beneath Segment 80DD and Segment 80DDB permit you to claim derivations for their restorative treatment, preparation, or restoration costs. The deductions can be substantial depending on the severity of the disability.
Explore tax-saving opportunities for disabilities at Enable India.
Learn more about medical expenses related to disabilities on Policybazaar
Example: For a dependent with severe disability, you can claim a maximum deduction of ₹1,25,000 under Section 80DD. Additionally, medical expenses up to ₹1,00,000 are deductible under Section 80DDB for specific illnesses.
9. Tax DeductionS for Contribution to National Pension Scheme (NPS) (Section 80CCD)
The NPS is a government-backed annuity plot that offers charge benefits underneath Section 80CCD. Commitments made to NPS qualify for an additional ₹50,000 determination over the ₹1,50,000 imperative of Zone 80C, giving impressive save stores.
Learn more about NPS at NSDL.
Get insights on retirement planning and NPS tax savings from ET Money..
10. Tax Deductions for Startups and Small Businesses
If you run a startup or a small business, you can claim various deductions for expenses incurred in your business operations. These include machinery, raw materials, employee salaries, and other costs. The Indian government also offers startup tax rebates under sections 80-IAC and 80-IA.
For startup tax-saving tips, visit Startup India.
Explore business deductions with resources from the Indian Angel Network.
FAQ on Hidden Tax Hacks
1. Can I claim deductions for home renovation loans?
Yes, interest paid on home renovation loans is eligible for deductions in Section 80E of the Income Tax Act.
2. What is the maximum deduction for donations under Section 80G?
The deduction amount depends on the type of institution, ranging from 50% to 100% of the donation amount.
3. How can I claim EV (Electric Vehicle) loan tax benefits?
You can claim a tax rebate for the complication on EV (Electric Vehicle) up to ₹1,50,000 annually Under Section 80EEB
Conclusion: Key Takeaways
Taxpayers have various opinions that can diminish their charge risk altogether. From giving to charity and claiming intrigued on domestic redesigns to sparing through electric vehicle credits and NPS commitments, citizens can make savvy choices to spare. Understanding and applying these lesser-known derivations to maximize your investment funds for the monetary year.
Actionable Tip: If you qualify for any of the above conclusions, don’t miss the chance to lower your assessment burden this year. Counsel an assessment master to guarantee you make the most of your qualified findings.
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