Tax Saving Beyond Section 80C
One of the main advantages of saving and investing money apart from the obvious monetary benefits is that they can help you save on your income tax as well. This is what urges most investors to invest in tax saving plans and endowment plans. But did you know that your tax saving plans are not all that tax saving? We all know that the premiums that we pay for these life insurance policies and savings plans are all tax-free but the returns your gain after the maturity of some of these plans can be taxable.
Most of us buy these Tax Saving Plans when we get that one email from our respective HR departments asking for proof of investment and expenses. We make these decision in a haste so as to submit our proofs and get done with it. But if you think about it, these tax saving plans can help you save a tonne of money for your personal expenses or even to save for the future. Here’s how you can make the most of Section 80C tax deduction.
Under Section 80C of the Income Tax Act of 1961, a person can get a deduction of Rs. 1.5 lacs on his/her income the rest of the income is taxable. This 1.5 lacs can be invested by the person in various Tax Saving Plans like Employees Provident Fund(EPF), Public Provident Fund (PPF), principle payments on home loans etc. What you need to do is find out which of these schemes you’ve already invested in and if you haven’t start investing right away. There are a lot of options to choose from for investment under the Section 80C, there’s the National Saving Certificate, the five year fixed deposit, ULIPs, life insurance plans and many more.
Apart from the Section 80 C deductions there are products that are under other sections of the Act and offer tax deductions. The one you absolutely must know about is health insurance. This is an essential insurance policy that everyone simply must invest in. It qualifies for a deduction of upto 25,000 under the section 80 D. If you buy health insurance for your parent who are senior citizens you get a deduction of 30,000.
Apart from these two sections, there is a third section, Section 80 E, that allows deduction on education loans. Their entire interest you pay for your education loan can be claimed as a deduction under this section.
So what are you waiting for? Invest wisely and make the most of it.