Guide to Tax Saving

There are many modes of tax saving investment options for the tax payer. One has to plan diligently before investing so that he can ensure optimum tax savings along with maximum returns from the investments made.

1. Make investment of Rs 1.5 lakh under Sec 80C to reduce your taxable income.

2. 80C deductions are PPF, NPS, EPF, Life insurance premium, tax-saving mutual funds (ELSS), children’s tuition fees and housing loan principal repaid among others.

3. Buy Medical Insurance & claim a deduction up to Rs. 25,000 or 30,000/- (based on seniority) for medical insurance premium under Section 80D.

4. Claim deduction up to Rs 50,000 on Home Loan Interest under Section 80EE for a loan amount not exceeding Rs. 35 lakhs (loan to be sanctioned between 1st April 2016 and 31st March 2017)

5. 80E – Deduction in respect of interest on loan taken for higher education only an individual can claim thisdeduction, it is not available to HUF or any other kind of taxpayers.Higher education loan taken for self, spouse or children’s or for a student for whom the individual is a legal guardian& the taxpayer can take 8 years period of deduction.

6. 80 CCD- Any assessee deposits amount in a pension scheme notified by the Central Government upto a maximum limit of 10 % of his salary or 20 % of his gross total income as the case may be. In addition to that a further sum of Rs. 50,000/- can also be claimed as deduction if he has invested in excess of the above said limits. 7. 80 GG – Any assessee who is not in receipt of HRA, any expenditure of rent in excess of 10% of his total income subject to lower of Rs 5000 p.m or 25% of his total income for the year.

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