scheme, with a permissible investment of Rs 50,000 and the exemption is available for Rs 25,000, i.e., 50% of the invested amount.
Donations to charitable institutions
If you are making donations to any charitable institution, trusts and societies and claim tax benefits, make sure that you do not pay over Rs 10,000 in cash because it would make you ineligible for tax deduction. For donations made for scientific research or rural development to research associations, universities, colleges or other associations under Section 80GGA, the deduction will be available on any sum that is over Rs 10,000 provided it is made in any mode other than cash.
Depending on the purpose of donation, the quantum of deduction could be 100% or 50% of the amount. For example, donations eligible for 100% deduction are Prime Minister’s National Relief Fund, National Defence fund, etc.
Donation eligible for 50% deduction are Prime Minister’s Drought Relief Fund, National Children’s Fund, donation to charitable trusts and societies notified by the tax department. In case of donations to private trusts, the actual amount of donation would be 50% of the qualifying amount. However, the deduction under Section 80G cannot exceed one's total taxable income.
Medical insurance premium, health check-up
Under Section 80D, medical insurance premium amount qualifies for deduction up to Rs 15,000 per annum; an additional amount of Rs 20,000 per annum is available for senior citizens. This year one can also claim deduction of up to Rs 5,000 for preventive health check-ups of self, spouse, dependent children or parents. For the purpose of deduction under Section 80D, payment can be made by any mode, including cash, in respect of any sum paid on account of preventive health check-up and by any other mode other than cash in all other cases.
Under Section 80DD, treatment of handicapped dependents qualifies for deduction. To claim deduction, one has to furnish a certificate from a government hospital practitioner in the prescribed format. A further deduction of Rs 15,000 is allowed for buying a health insurance policy for parents.
A salaried taxpayer should look into these options to save taxes, while factoring in short-term, medium-term and long-term needs and financial goals.