Maximize your tax savings with these 5 investment options beyond section 80C
Reported By:| Edited By: Raunak Jain |Source: DNA Web Desk |Updated: Dec 31, 2022, 12:07 AM IST
Saving on taxes is a top priority for many individuals and businesses. While investing in tax-saving instruments under Section 80C of the Income Tax Act is a common way to reduce one’s tax burden, there are several other options available to help you save on taxes. Here are five tax saving tips beyond Section 80C that you may want to consider:
Health Insurance: Investing in a health insurance policy not only ensures financial protection in case of unforeseen medical emergencies, but also offers tax benefits. Under Section 80D of the Income Tax Act, you can claim a deduction of up to INR 25,000 on the premium paid for your health insurance policy. If you are a senior citizen, this deduction can go up to INR 50,000.
Long-Term Capital Gains (LTCG) Tax: If you have made a profit from the sale of a long-term capital asset, such as a property or shares, you may be liable to pay LTCG tax. However, you can save on this tax by investing the proceeds from the sale in specified assets, such as bonds issued by the National Highway Authority of India or the Rural Electrification Corporation, within six months of the sale. This investment will not only help you save on LTCG tax, but also earn you a steady stream of income in the form of interest.
Renting Out a Property: If you own a property that you are not using, you can save on taxes by renting it out. The rent received is taxable under the head “income from house property,” but you can claim a deduction for expenses such as repairs, insurance, and property tax. Additionally, you can claim a deduction of up to INR 2 lakhs under Section 24 for the interest paid on a home loan taken to purchase or construct the property.
Also read: 5 Financial tips for women: How to secure your financial future and take control of your money
National Pension System (NPS): The NPS is a retirement savings scheme that allows you to contribute a portion of your income towards a pension fund. Not only do you get a tax deduction of up to INR 1.5 lakhs under Section 80CCD(1B) on your contribution to the NPS, but the returns earned on your investments are also tax-free.
Donations to Charitable Institutions: Donating to charitable institutions can not only help you save on taxes, but also provide a sense of satisfaction knowing that you are contributing towards a good cause. Under Section 80G of the Income Tax Act, you can claim a deduction on donations made to certain charitable institutions and trusts. The deduction can be either in the form of a percentage of the donation or a fixed amount, depending on the institution.
These are just a few of the options available for tax savings beyond Section 80C. It is always a good idea to consult with a financial advisor or tax professional to determine the best course of action for your specific financial situation. By taking advantage of these tax saving opportunities, you can not only reduce your tax burden but also secure your financial future.