PPF, NPS, ELSS, Bank Tax Saver FD, and ULIPs are some of the common ways to save tax through investment. Butwhat if you don't want to invest and lock in your hard-earned money? Well, there are still other ways tosave income taxwithout investing your money.
Tax-Saving Ways Without Investment
1.Insurance premium
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Your life andhealth insurance premiums can be claimed as tax deductions under Sections 80C and 80D, respectively. The limits to claim a tax deduction under Section 80D depend on who is included under the health insurancecover and their age. Hence, depending on the taxpayer’s family members, such as spouses, parents, and children for whom the insurance is taken, the limit could be between Rs 25,000 and Rs 1 lakh.
Forlife insurance premiums,the limit is up to Rs 1.5 lakh under Section 80C.
2.Children’s Tuition Fee and Hostel Allowance
According to Section 80C, you can claim a deduction of the tuition you pay for your children (maximum of two) to any educational institute;however, the limit is Rs. 1,50,000. Other than that, according to Section 10(14), you are exempt from paying taxes for special allowances given by employers for the education of your children, which might include hostel expenditures.
3.Education loan repayment
Many of us who begin earning after finishing our higher education tend to have the burden of repaying our education loan's EMIs. While you manage your finances in the early stages of your career, do not miss out on availing of the tax benefit on an education loan if you fall into the taxable income bracket.
The interest component of your education loan EMI repayment can be claimed as a tax benefit under Section 80E of the Income Tax Act. This tax benefit can be claimed by either the parent or the child (student), depending on who repays the education loan.
4.Home loan repayment
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While you repay the home loan EMIs, remember that the principal component is eligible for tax deduction under Section 80C. As far as the interest component is concerned, home loan borrowers can claim a tax deduction under Section 24 of the income tax. The maximum tax deduction that a taxpayer can get here on the interest payment of a home loan taken for a self-occupied property is Rs 2 lakh.
Also Read:PPF vs BankTax SaverFD-Which One To Choose ForTax Saving?
5.Deduction on rent for those not receiving HRA
While most of us know that employees receiving HRA can claim a tax deduction on the rent paid by them under Section 10(13A), do you know that even those living in rental accommodation but not receiving HRAas a part of their salaries or non-salaried people living in rented accommodation can claim a deduction for their rent expense under Section 80GG of the Income Tax Act?
6.Interest paid for loans taken to purchase e-vehicles
Given the environmental benefits of EVs, the government has been encouraging citizens to buy an electric vehicle.One of the steps taken by the government towards its vision of making electric vehicles (EVs) affordable to consumers and making it an additional incentive for people to buy them is by providing a deduction of up to Rs 1.5 lakh per year under Section 80EEB for interest payable on loans availed to purchase EVs.
The individual taxpayer may have an electric vehicle for personal or business use. To avail of this deduction, the loan must be taken between April 1 and March 31, 2023.
7.Interest earned from a savings account
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More often than not, taxpayers are unaware of this benefit available under Section 80TTA. This section makes interest income of up to Rs 10,000 p.a. earned from savings accounts tax-free, beyond which the interest income becomes taxable as per the tax slab of the depositor.
Also Read:Why LifeInsurancePremiums Are Cheaper For Women
8.Disabled dependent's medical expenses
If, as a taxpayer, you are looking after disabled dependents, you can claim a tax deduction on expenses under Section 80DD.This deduction is offered to help taxpayers take care of their disabled family members who are dependent on them.
A taxpayer can claim a tax deduction up to ₹ 75,000 in a financial year if the dependent person has at least 40% of any of the specified disabilities. A taxpayer can claim a tax deduction up to ₹ 1.25 lakh in a financial year if the dependent person has at least 80% of any of the specified disabilities, which are considered to be severe disabilities.
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