4. Interest Component Paid Towards Home Loans
Section - 24(b)
Limit – ₹2 Lakh
Interest payments on a home loan can be removed from income tax calculations under this section. If the house is purchased for residence, a maximum of ₹2 Lakh can be claimed as a tax rebate on the interest rate, provided the construction is completed within five years of the loan tenure.
If you choose to let out the purchased property on rent, then no tax has to be paid on the interest component of the home loan respectively.
5. Interest Component Paid Towards Home Loans for First Time Home-Buyers
Section - 80EEA
Limit – ₹50,000 above benefits from Section 24(b)
First-time home-buyers can claim additional interest benefits amounting to ₹50,000 above Section 24(b) on home loan EMIs, provided the property value is less than ₹45 Lakh. This effectively makes way for up to ₹2.5 Lakh tax-saving other than Section 80C.
However, no prior property should be registered under an applicant’s name while availing a home loan to be eligible for a tax rebate on total income spent on EMI payments under Section 80EEA.
6. Sum Assured on Maturity of Life Insurance Plans
Section - 10(10D)
Limit – Entire maturity amount
The entire sum assured disbursed upon maturity of life insurance or untimely death of an insured person can be claimed for tax rebate under Section 10(10D).
However, such death benefit is exempted from tax calculations if it is availed after 1st April 2012, and total value premium charges are less than the full sum assured.
If the policy is availed before 1st April 2012, then the premium expenses should be less than 20% of the total sum assured to be eligible for waivers under section 10(10D).
7. House Rent Allowance Provided Under Salary Break-Up
Section - 10(13A)
Limit – Specified conditions
This provision of the Income Tax Act caters to tax benefits under house rent allowance (HRA), provided your salary break up contains the HRA component. A total exemption granted under this scheme is the minimum value of the following:
- Actual annual HRA disbursed.
- 50% of yearly salary.
- Yearly rent paid – 10% of basic income.
8. House Rent Allowance Component Not Included Under Salary Break-Up
Section - 80GG
Limit – Specified conditions
If your company does not include the HRA component in your salary break-up, you can claim exemptions on your total taxable income through Section 80GG. Such tax-saving investments other than 80C grants waivers up to the least value of the listed parameters:
- ₹5,000 per month.
- 25% of the total annual income.
- Annual rent – 10% of the basic annual income.
9. Donations to Charitable Organisations
Section - 80G
Limit – No limit
Any income donated to charitable organisations is exempt from tax calculations entirely under Section 80G. No limit on such tax waivers are levied provided transfers have been made through banks.
Any cash donations are exempt from tax calculations for up to ₹2,000. However, such contributions have to be made in registered charitable organisations.
10. Donations Made Towards Scientific Research and Rural Development
Section - 80GGA
Limit – No limit
If donations are made for scientific research and rural development, tax waivers on the same can be claimed under Section 80GGA.
100% of the income spent is eligible for such deductions, provided the transaction has been made through a bank account and is documented.
11. Donations Made Towards Political Parties
Section - 80GGC
Limit – No limit
Donations made to political parties are also tax saving other than Section 80C. The entire contribution is waivered from tax calculations, provided it was made through wired bank transfers.
Also, the political party to which such contributions were made has to be registered under Section 29A of the Representation of People Act (RPA) of 1951.
12. Expenses Incurred Towards Treatment of a Disabled Person
Section - 80DD
Limit:
- ₹75,000 for 40%-80% disability
- ₹1,25,000 for higher than 80% disability
Individuals and Hindu Undivided Families (HUF) paying for the treatment and wellbeing of a disabled family member can claim exemptions on total income spent to cover such expenses under Section 80DD.
The coverage limit is determined based on the percentage of disability, wherein people having 40-80% disability are eligible for deduction up to ₹75,000.
Families hosting a person having disability higher than 80% can claim up to ₹1.25 Lakh inclusive of all related expenses. Such claims are granted only to the family of such dependent individuals.
13. Income Tax Benefits Extended Towards Disabled Individuals
Section - 80U
Limit:
- ₹75,000 for 40%-80% disability
- ₹1,25,000 for higher than 80% disability
Disabled individuals can claim compensation in the form of tax waivers under Section 80U. Such disability has to be certified by a registered medical authority with at least 40% impairment.
Incapacitated individuals suffering from 40-80% disability can claim ₹75,000, while people suffering from higher than 80% disability are entitled to maximum ₹1.25 Lakh through tax benefits.
14. Expenses Incurred Towards Treatment of Individuals With Specific Disease or Disability
Section - 80DDB
Limit - ₹40,000 (₹1,00,000 for senior citizens)
People financing the treatment of dependent family members diagnosed with certain specific diseases can claim tax waivers on subsequent income spent.
A maximum of ₹40,000 is disbursed in such cases for individuals below the age of 60. Such waiver consequently increases to ₹1 Lakh for senior citizens (60-80 years) and super senior citizens (above 80 years).
Such waivers can be received for the treatment of critical illness such as neurological diseases (causing 40% or higher disability), malignant cancers, AIDS, chronic renal disease, and haematological ailments.
Thus, there are several ways for tax saving other than Section 80C, which can effectively increase your total wealth in the long term. Most such tools act as a comprehensive investment tool as well; allowing realising higher returns or reduces obligatory expenses.
