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Income tax: It becomes essential to take well-informed decisions about tax-saving investments before the March 31 deadline, especially for those who opt for the old tax regime. It is not recommended to randomly allocate money to any tax-saving option.
Assess existing Section 80C investments
Abhishek Soni, CEO and co-founder of Tax2Win, said, “Evaluate existing investments like insurance premium, EPF contribution etc. Subtract this from the limit of ₹1.5 lakh to know the remaining eligible amount.”
Popular Section 80C Options
Consider LIC policies, PPF, fixed deposits and tax saver mutual funds.
National Pension System (NPS)
Contributions to NPS in excess of the limit of Section 80CC are eligible for tax deduction under Section 80CCD(1B). Additionally, taxpayers can claim additional deduction up to Rs. 50,000 under this section.
“To save further tax, you can consider depositing up to ₹50,000 every year in an NPS account to claim special deduction under Section 80 CCD (1B). This will take your deduction to ₹2 lakh,” said Mumbai-based tax and investment expert Balwant Jain.
health insurance
Premiums paid for health insurance policies for self, spouse, children and parents are eligible for tax deduction under section 80D.
“Medical insurance premium claim of Rs. 50,000. (₹25,000 for self, spouse and children and ₹25,000 for dependent parents below 60 years of age). Claim medical insurance premium paid up to a maximum of ₹1,00,000 per annum for senior citizens. If the senior citizen is not covered under any health insurance, the medical expenses incurred can be claimed under 80D up to ₹50,000,” said Archit Gupta, founder and CEO of Clear.
Interest paid on home loan
Deduction of up to ₹2 lakh can be claimed under Section 24 on interest paid on home loan.
According to Archit Gupta, Section 80EE also allows you to claim deduction of up to ₹50,000 on home loan interest which is more than the Section 24 limit.
Gupta said, home loan will also help in reducing your taxable income as the principal portion of the home loan can be claimed under Section 80C up to ₹1.5 lakh and the interest portion can be claimed as deduction in income from house property. Can be done as.
By strategically taking advantage of these options that suit your financial goals, you can optimize tax-saving investments before the deadline. Consulting a tax expert can provide personalized advice.
Disclaimer: The views and recommendations given above are those of the individual analysts and not of InformalNews. We recommend investors to check with certified experts before taking any investment decision.