Tax saving beyond the Section 80C limit

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Tax Saving Plans
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Tax saving beyond the Section 80C limit
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Introduction
Section 80C of Income Tax Act allows tax payers
to claim deductions from their taxable income (up
to Rs 1 Lakh) by investing in certain
instruments. However, many tax payers are not
aware that, there are other sections of the
Income Tax Act that allows tax payers to claim
further deductions from their taxable income,
beyond the 80C limit of Rs 1 lakh. In this
article, we will discuss ways to save taxes
beyond the Rs 1 lakh of Section 80C.
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Premium paid for Medical Insurance
 Medical insurance premium for self, spouse,
dependent children and parents are eligible for
deduction under Section 80D of the Income Tax
Act. The maximum allowable deduction is Rs 15,000
for self, spouse and dependent children. The
applicable deduction for senior citizens is Rs
20,000. If an individual pays for medical
insurance of parents who are senior citizens,
then he or she can claim an additional maximum
deduction of Rs 20,000. However, if the parents
are not senior citizens, then a maximum of Rs
15,000 can be claimed as additional deduction.
Therefore the total amount of the deduction the
individual claim for medical insurance for self,
spouse, dependent children and senior citizen
parents is Rs 35,000.
Treatment of specified diseases
 Medical treatments for specified serious
diseases, like cancer, AIDS, Parkinsons disease,
chronic kidney failure etc, either for self or
dependents are eligible for deduction under
Section 80DDB. For clarification on specified
diseases, you should refer to the relevant
section (80DDB) of the Income Tax Act or consult
your tax consultant. Actual expenses or Rs
40,000, whichever is lower, is eligible for
deduction under this section. For senior citizens
the upper limit is Rs 60,000.
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House Rent Allowance
 If you are paying rent for your accommodation,
you should claim house rent allowance from your
employer, if allowed under your companys policy.
This will reduce your taxable income and your tax
obligation. If you are self employed or a
salaried individual who does not receive House
Rent Allowance (HRA) from the employer, do not
despair.
Leave Travel Allowance
 If allowed within your companys policies, use
your Leave Travel Allowance for your holidays,
which is available twice in a block of four
years. If you do not avail of the Leave Travel
Allowance, your employer will be pay it to you in
your monthly pay cheque as part of your salary,
after deducting tax at source at your applicable
Tax Saving Plans slab rate. To claim deduction on
taxes, you will be required to furnish copies of
tickets as proof to claim the tax deduction. If
you are been unable to claim the benefit in a
particular four year block, you could carry
forward one trip to the succeeding block of 4
years, but make sure you claim it in the first
calendar year of that block.
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Conclusion
we have discussed various tax-saving
opportunities beyond the 80C limit of Rs 1 lakh.
You should ensure that you understand the
different provisions of tax saving in the Income
Tax Act, and see if these provisions apply to
you. If the Government announces new tax benefits
in the upcoming Budget, you should go through
them carefully, so that you can maximize your tax
savings. Maximising tax savings puts more cash in
our hands that we can use to invest in our
future. However, we should be careful in
interpreting the various provisions under the
different sections of the Tax Saving Plans and in
case of any confusion consult a chartered
accountant or tax consultant.
Sourcehttp//bit.ly/2dr600v
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