Tax Saving Options

Here are 5 tax-saving options:

1) Section 80C: This section of the Income Tax Act mentions various tax-saving schemes. However, it imposes a limit of Rs 1 lakh every financial year. Some of the schemes mentioned are -
a. Public Provident Fund (PPF) a low-risk, long-term savings instrument operated by the government of India;
b. Employee’s Provident Fund (EPF), a mandatory retirement planning fund where every employed individual has to save minimum 12% of his/her basic salary;
c. Equity-Linked Saving Scheme (ELSS), diversified equity mutual funds where  investors enjoy both tax rebates as well as an appreciation of capital;
d. Unit-linked Insurance Plans (ULIPs), an insurance-cum-investment product;
e. National Savings Certificate (NSC), a 5-year or 10-year savings bond offered by the Department of Post;
f.  Infrastructure bonds, long-term bonds issued by the RBI facilitating investment in infrastructure projects offering tax rebate upto Rs 20,000;
g. Long-term bank deposits with government-owned Scheduled banks upto Rs 1 lakh per year. However, interest accrued is not exempted from tax.

2) Section 80D: This section offers tax benefits on the premiums you pay for your medical insurance upto Rs 15,000. Any amount paid for medical treatment of certain diseases also can get you a tax rebate of upto Rs 40,000, or Rs 60,000 if you are a senior citizen.

3) Section 80E: Interest paid on education loans can be deducted from your tax liabilities as per Section 80E of the Income Tax Act. However, this is valid only for the first 8 years of the loan.

4) Section 24: You can deduct Rs 1.5 lakh for the interest amount on your loans for a self-occupied house. If the house is rented out, then the tax deduction will be equivalent to the actual interest being paid every year.

5) Section 80T: This section was introduced in the 2012-13 budget. According to this, total interest income from all savings accounts up to Rs 10,000 are eligible for tax deduction.