Tax saving options other than Section 80C

For tax savings, you can  invest 1.50 under section 80C. There are several tax saving options other than Section 80C.

Section 80CCG Rajiv Gandhi Equity Saving Scheme (RGESS)

First time equity investors (who have not made any form of equity investing yet) with an annual income of less than 12 lacs can invest up to Rs 50,000 in RGESS and claim 50% tax benefit of the invested amount.

The investment can be made only once in this scheme. So you are a first time equity investor and put Rs 50,000 in RGESS, then can claim 25,000 (50% of the amount invested) for tax benefit; hence maximum can save tax of Rs 7,500 if you are in 30% tax slab (30% of 25,000).

Points to note:  

Only first time investment is eligible for tax benefit, investment made in subsequent years will not be eligible for tax exemption.

The amount will be locked in for three years.

 Section 80D (Health Insurance)

Deduction up to Rs 15,000 under section 80D qualifies for mediclaim policies, i.e. the premium amount paid for a health cover. The premium of a medical insurance policy for self and family members (spouse, children and dependent parents) to protect them from medical expenses, comes under this section.

The limit is Rs. 20,000 in case of senior citizens.

Section 80DD (Medical Treatment)

Up to Rs 50,000 a financial year for the medical treatment or specified insurance scheme (premium to any insurance company for the medical treatment) of a dependent (spouse, parents, kids or siblings.) with 40% disability is eligible for exemption under the section 80DD.

If the disability is 80% or more, then up to Rs. 1,00,000 per year can be claimed as deduction. You need to submit the medical certificate issued by a medical authority to initiate the process.

 Section 80DDB (Treatment of specified critical ailments)

Individual can claim a deduction for the actual amount paid (up to a maximum of Rs 40000 for non-senior citizen and 60000 is case of senior citizen) for the treatment of few specified critical ailments under the section 80DDB. It also can be claimed on behalf of dependents as well.

You need to submit a medical certificate from a doctor working in a government hospital to avail this benefit.

Here are the few specified diseases and ailments that qualifies for 80DDB deduction:—

   (i)   Neurological diseases like Dementia, Dystonia Musculorum Deformans, Motor Neuron Disease, Ataxia, Parkinsons Disease etc.

 (ii)   Cancer

 (iii)   Full Blown Acquired Immuno-Deficiency Syndrome (AIDS)

 (iv)   Chronic Renal failure

 (v)   Hemophilia

 (vi)   Thalassaemia etc.

 Section 80E (Interest paid on education loan)

The interest paid on education loan for pursuing higher education in India or abroad for a full time course (Not applicable for part-time courses) from a financial Institute or an approved charitable institute is exempted from tax under section 80E. An education loan can be taken for wife, children and minors for whom you are the legal guardian. The maximum period for which the deduction is available is eight years or till the interest is paid, whichever is earlier.  This is in addition to the deduction allowed under section 80C. But, one cannot claim the benefit for repayment of the principal amount.

From 2011 onwards the scope of exemption has been extended to cover all fields of studies including vocational studies pursued after completing the senior secondary examination or equivalent.

 Section 80U (Deduction for physical or mental disability)

It allows a deduction for any resident of India suffering from physical or mental disability to the extent of Rs 50000 for 40% (blindness, low vision, mental illness, mental retardation, hearing impairment) and Rs 1 Lac for 80% disability under section 80U.

One needs to provide the copies of all the certificates issued by a medical authority in order to avail this benefit.

 Section 80G (Donation to Relief Funds)

If you donate to National Defense Fund, Prime Minister Relief Fund, National Foundation for Communal Harmony, National Children Fund and some other relief funds as listed in section 80G, then the full amount(100%) is eligible for tax deduction. Similarly 50% of the amount is allowed for deduction if donated to certain other specified funds listed in section 80G.

 Section 80GG (Rent Paid)

If you are staying in a rented house and do not receive any kind of HRA, then can claim a deduction under section 80GG. However, you cannot avail any such benefit if you, your spouse or your child owns any residential accommodation in India or abroad. You can claim the least of the following under Section 80GG:

1)    25 per cent of the total income, or

2)    Rs. 2000 per month, or

3)    Excess of rent paid over 10 per cent of total income.

 Section 80GGC (Contribution to political party or electoral trust)

Any contribution made to any political party or an electoral trust is eligible for tax exemption. Thus the total amount contributed to the political party gets deducted from tax under section 80GGC.

Section 80TTA (Interest earned in bank’s savings account)

Individual/HUF can get tax exemption on the interest earned in bank’s savings account (Not time deposits or fixed deposits) up to maximum Rs. 10,000. Hence, if your savings bank’s interest exceeds 10,000 then bank deducts TDS (Tax Deductible at Source).