Often, there is too much focus on Section 80C during tax planning. However, it is a much wider subject and there are several items that one could look at to optimise on taxes. Here?s an overview on some of those aspects.

Exemptions ? Save taxes without investing

There are a few exemptions that are popular and are a part of the salary stack across most companies. Here is a summary of the most popular exemptions.

House Rent Allowance. As per IT laws, a minimum of the three conditions would be exempt for taxes: HRA as part of salary stack; rent paid ? 10% of basic; and 40% of basic (non-metro) or 50% (metro).

An additional tax-saving tip is that rental proofs are not required if the rent paid is less than or equal to R3,000 per month. However, a self declaration is mandatory.

Leave Travel Allowance. LTA is one exemption with nuances about which awareness levels are low. Although as per IT laws, there is no monetary limit, the company could impose one. Two trips in a block of four years are allowed (current block being 2006-09). While, for all income tax purposes, one uses the FY ending March 31, for LTA purposes, one could use the calendar year, ending December 31. One needs to provide relevant proof for the trip conducted, wherein the route opted for should be the shortest distance and the destination has to be a single place. Also, one needs to take leave from the company (minimum two days, but may vary based on company policy) to claim this exemption. This can be availed for family members as well.

Other Allowances. Medical allowance up to a maximum of R15,000 per annum is allowed. Medical bills are to be produced for the same. Conveyance is allowed up to a maximum of R800 per month.

Housing Loan. Housing loan is the only loan liability that comes with attractive tax-breaks (only interest deduction is eligible for an educational loan). The EMI will have two components ? interest and principal ? and both can help you reduce your taxability.

The interest paid towards such loan can be claimed under Section 24 under the head ?Loss from House Property? ? for a self-occupied property, there is an overall limit of R1.5 lakh. For a let-out property, there is no such limit.

However, in this case, one has to bring in the rental income (from which you can reduce municipal taxes and 30% of rental income towards maintenance) and set off the interest against it to avail the net amount as loss (if any) under house property. The principal in both these circumstances can be claimed under Section 80C, which has a total limit of R1 lakh.

Popular deductions apart from Sec 80C

Section 80CCF. This is over and above the Section 80C limit of R1 lakh. This investment is specifically into infrastructure bonds with a R20,000 limit.

Section 80D. The medical premium amount will qualify for deduction to the extent of R15,000 per annum, an additional amount of R20,000 per annum qualifies for senior citizens. There is also a benefit for medical insurance premiums of one?s parents to a similar extent.

Section 80DD. Treatment of handicapped dependents qualifies for deduction.

Section 80DDB. Costs incurred for treatment of specified illnesses could fetch you a tax benefit. For individual assesses less than 65 years of age, a deduction limit of R40,000 is applicable. For a senior citizen, the limit is R60,000.

Section 80E. This Section allows deductions on the entire interest amount on a loan taken to fund higher education courses within the country for self, spouse and children. Individuals can also claim a rebate if they are legal guardians for students who aren’t related to them.

Section 80G. Deduction is available to any tax payer donating to a charitable organisation. Either 50% or 100% qualifies for deduction, depending on the type of the charitable organisation.

n The writer is CEO and founder of Right Horizons