It’s the time of year when people scramble to finalise their tax-saving declarations and investments. But there’s no need to jump into whatever investments are immediately available—even at this point, a systematic approach is best. And it can be wise to first assess the expenses one has already incurred to see if they allow for tax-savings.
EXPENSES WITH BENEFITS
Many common expenses fall under different sections of the Income Tax Act and allow for tax-savings. These include tuition fees, leave, travel and house rent allowances, home loan payments, dependant expenses, as well as life and health insurance premiums. Those aside, investments in provident funds, certain fixed deposits and mutual funds, unit-linked insurance plans and pension systems also allow for tax-saving.
Education: Expenses incurred for education for dependants can be claimed under Section 80(C), up to a limit of Rs 1.5 lakh. Only tuition fees paid to government-recognised universities, colleges, schools or other institutions, for a full-time course, can be claimed. Related expenses, like transportation, food and others, are not covered. Those who have taken education loans for themselves, their spouses or their children can claim deductions on the interest paid under Section 80(E), with no limit on the amount of interest that can be claimed as deduction for the first eight years of the loan.
House rent: Skyrocketing real estate prices might have kept dream homes out of reach for many Indians, but renting does have a silver lining—the tax savings permitted on house rent allowances. Taxpayers can claim the lowest of the following for deductions—the actual house rent allowance; 40 per cent of basic salary (50 per cent in metros); or rent paid less 10 per cent of basic pay.
Bu hikaye India Today dergisinin January 13, 2020 sayısından alınmıştır.
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Bu hikaye India Today dergisinin January 13, 2020 sayısından alınmıştır.
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