Section 80C lowers your tax liability by a maximum of ₹1.5 lakh through instruments like PPF, ELSS, and life insurance premiums. But once that limit is reached, most taxpayers overlook other deductions that can lower their tax outgo. These deductions are applicable only under the old tax regime. From health insurance to pension schemes, there are several options beyond 80C that enjoy tax benefit under other sections.
Utilize Section 80D for health insurance premiums
Premium payment towards medical insurance of spouse, children, parents, or yourself is tax deductible under Section 80D. You are entitled to claim a deduction of ₹25,000 (₹50,000 in case of senior citizen coverage) under this. If you have both non-senior and senior citizen parents who are medically insured, you can claim a deduction of ₹75,000. Not only does this help you save tax, but also gives you medical cover in times of need—something not available through 80C investments.
Invest in NPS under Section 80CCD(1B)
The National Pension System (NPS) also allows an additional ₹50,000 deduction over and above the 80C limit, under Section 80CCD(1B). Additional to the ₹1.5 lakh permissible limit under 80C, this acts as a retirement corpus. Stability-oriented yet market-linked are returns on NPS, and Tier I contributions are locked until retirement age, giving long-term tax and pension benefits.
Claim HRA or home loan interest under separate sections
If you are a home-owner who rents out the property, you can take House Rent Allowance (HRA) under Section 10(13A)—along with 80C. If you have taken a loan, interest paid (up to ₹2 lakh annually) is allowed as a deduction under Section 24(b), and the amount of loan taken is already exempt under 80C. First-time homebuyers can also claim an extra ₹50,000 under Section 80EE if conditions are met.
Donate and save using Section 80G
Donations to qualified charitable trusts and relief funds are deductible under Section 80G. The rate of claim depends on the organisation and type of gift—50% or 100% might be allowed by some. It's a tax-saving method with a social implication. Be sure to carry receipts and check if the organisation is eligible as per the Income Tax Department to get the benefits under 80G.
Don't miss education loan and disability deductions
Interest on education loans is deductible under Section 80E without any cap for 8 years. If you or your dependent are disabled, Section 80U or 80DD gives fixed deductions of ₹75,000-₹1,25,000 depending on the severity of the disability.
These lesser-known provisions can mean real tax savings if used in the right way, especially when you've already reached 80C.
FAQs
Q. Is ELSS allowed under 80CCD(1B)?
No. ELSS comes under 80C. Section 80CCD(1B) is for contribution to the National Pension Scheme alone.
Q. Can I use 80C and 80D both in one year?
Yes, 80D is another section for health insurance. You can even claim it after using 80C to the limit.
Q. If my donations are not issued with an 80G receipt?
You will not be able to avail the deduction. Always check the 80G status of the organisation before donating.
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