Finance Minister Nirmala Sitharaman is going to present the general budget for the financial year 2021-22 on 1 February. In such a situation, most people have their eyes fixed on the Income Tax slab. Income tax is levied on income above Rs 2.5 lakh in the country. But you can save tax by investing money in different places in a planned way. Let’s know about those methods …
Donation (80G)
If you make charity, you can save tax on this too. Donation made to a recognized charitable institution under section 80G is subject to tax exemption. However, the entire donation is not available.
Special disease treatment (80DDB)
Treatment of specific diseases such as cancer, neurological disease or AIDS is quite expensive. The government gives tax exemption of up to Rs 40,000 under section 80DDB. In the case of senior citizens, this tax exemption is Rs 1 lakh.
Divyang Medical Expenses (80DD)
If you take care of a Divyang, then the expenses incurred on it can be claimed under section 80DD. That disabled person can be any member of the family, such as parents, children or siblings. How much tax exemption you will get depends on disability of the PwD. There is a tax rebate from Rs 75,000 to Rs 1.25 lakh.
Saving Bank Interest (80TTA)
You can also get tax rebate on the interest from saving bank account. Under Section 80TTA, any person or HUF can get tax exemption up to a maximum of Rs 10,000. This includes banks, co-operative societies or post office saving accounts.
This tax exemption is for everyone, there is no condition for senior citizens. Interest above Rs 10,000 will be counted in the other income category and tax will have to be paid on it. Suppose you get an interest of Rs 15,000 in a financial year from four saving bank accounts, then you will get tax exemption on Rs 10,000, but you will have to pay tax on the remaining Rs 5,000.
HRA (80GG)
If you are salaried and your company gives HRA, then you get tax exemption on rent. But if you do not get HRA, then you cannot claim tax exemption on house rent. This happens when you either work in the unorganized sector or do some work of your own. The government gives the option of section 80GG to such people.
First time buying a house (80EE)
The government gives additional rebate on the interest of home loan under section 80EE to those who buy their first house, provided there should be no other house in your name before this. Under this section, you can claim additional tax up to Rs 50,000. This exemption is in addition to the exemption provided under section 24. That is, for the first time home buyers get a discount of at least 2.5 lakh rupees in a year only on the interest of home loan. The condition for this is that the property should be worth less than Rs 50 lakh and the loan should be 35 lakh or less.
Home loan interest (section 24)
You can claim tax exemption on home loan repayment in two ways. On the principal amount, you get a tax rebate of Rs 1.5 lakh under 80C, as well as a rebate on interest component under section 24. Under this section you can get tax exemption up to a maximum of 2 lakh rupees, provided the property is in your name and you live in it. If you do not live in that house but you have given it on rent, then there is no limit to claim your tax exemption, that is, whatever interest you have paid during one year, will come under the tax rebate.
Education Loan (80E)
If you have taken a loan for the education of children, then you can claim tax exemption on the repayment of it. Under section 80E you can get tax rebate on the interest portion of education loan. Anyone can take this tax exemption parent and child, it will be decided on who is paying the loan. There is no limit of tax exemption, you can claim tax exemption on interest as much as you want.
Health Insurance (80D)
Under section 80D you can claim health insurance premium. How much tax exemption you will get under 80D depends on who is included in this policy and what is their age. In this way, you can claim tax savings of up to Rs 25,000, Rs 50,000 and Rs 1 lakh.
National Pension System (80CCD (1B))
In the National Pension System (NPS), you save tax of Rs 1.5 lakh under section 80C, but above this, additional savings of Rs 50,000 can be made under section 80CCD (1B). That is, you can save up to 2 lakh rupees in total.
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