Apart from the popular Section 80C, other deductions can also help reduce tax liability.
Most taxpayers look at Section 80C deduction to save tax. However, under the Income Tax Act, there are many other deductions from one’s gross total income which can help an individual reduce his tax burden. Here are some sections in the Income Tax Act, 1961, which can help you to reduce your tax burden.
Interest on savings account
Under Section 80TTA of the Income Tax Act, individuals can claim deduction on the interest earned on savings bank account. The maximum amount that can be claimed as deduction under this section is R10,000 a year. The amount has to be shown as income from other sources in the income tax returns and then claim deduction under section 80TTA.
Health insurance premium
Under Section 80D of the Income Tax Act, medical insurance premium of up to R25,000 paid for self, spouse and children will qualify for deduction. If the person is a senior citizen (60 years or more), then the limit will be R30,000. To claim deduction, the premium has to be paid by any mode other than cash and the insurer has to be approved by the Insurance Regulatory and Development Authority of India (IRDAI). One can also claim deduction of up to R5,000 for preventive health check-up of self, spouse, dependent children or parents.
Money spent on the medical treatment or rehabilitation of handicapped dependent children can be claimed as deduction up to R75,000 under Section 80DD. In case of severe disability, however, deduction allowed is R1,25,000.
By taking an education loan for higher studies, one can claim deductions on the entire interest amount under Section 80E. The deduction on the interest paid can be claimed for a loan taken for education of not only the child but also for self and spouse. Only the interest paid is deducted from the income and one can claim the benefit for eight years in a row, beginning from the year when the interest payment starts. However, the deduction is given only to an individual and not to Hindu Undivided Family.
Royalty income to author
Under Section 80QQB of the Income Tax Act, if an individual has authored a book (other than textbooks for schools and colleges) and have received royalty payments, then the amount can be claimed as deduction of up to Rs 3,00,000 as lumpsum royalty. If royalty is not received as lumpsum then the amount of deduction will be 15% of the book’s revenue that year.
Royalty income from patents
Under Section Section 80RRB of the I-T Act, if an individual is a patentee and have registered the patent after April 2003 and receive royalty income for it, then the tax payer can claim deduction for up to R3,00,000.
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Under Section 80EE of the I-T Act, payment of interest on home loan is available for deduction up to R50,000 per annum provided the loan has been taken between April 1, 2016 and March 31, 2017. The loan amount has to be below R35 lakh, the value of the house not over R50 lakh.
Also, under Section 24 of the Income-Tax Act, up to Rs 2 lakh can be deducted from taxable income as interest repayment for a self-occupied house. However, this deduction is not available if the house is still under construction or if you have not taken possession. The principal repaid is eligible for deduction under Section 80C, which has a limit of R1.5 lakh. Moreover, one-time stamp duty charges paid for house registration also get tax exemption under Section 80C of the I-Tax Act.