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Deduction Which Can Save You Some Tax

Reduction in tax liability is one of the options to save money on time instead of waiting for refunds. While Life Insurance Premiums are the favourite amongst middle income groups, here are of the tax deductions that can save approximately Rs 60,000/- apart from Rs 1.5 Lakhs under Section 80C of the Income Tax Act.

House rent allowance: The maximum allowance under HRA is lower of 40% of the basic salary or actual rent paid or actual rent paid as reduced by 10% of basic salary. To avail this benefit, one has to submit the rent receipts duly signed by the owner of the property.

Perks and allowances: Transport allowance, medical allowance, leave travel allowance and entertainment allowance come under this category which is usually a part of the salary structure in organisations.

Insurance premium: while this is a most pushed policy to save taxes, one has to be careful of mis-sellings. Never subscribe for an insurance policy to claim Income Tax Deductions.

EPF, PPF and NPS are other government linked savings schemes that give consistent returns and risk free.

Medical and life insurance premiums are yet another deduction allowed under the Income Tax Act falling under Section 80D, means this falls outside the Rs 1.5 Lakhs under section 80C. Therefore one can claim tax deduction of additional Rs 15,000- Rs 20,000/- .

Home Loan EMI and education fee are other avenues where are eligible for Income Tax Deductions.

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