Income Tax Deductions: The days of filing income tax return are coming closer. At this time, people’s attention turns towards how much tax will be made on their income in the ongoing financial year and in what ways they will be able to save their tax.
This is the time when people also start investing in many investment tools in order to save tax. Under Section 80C of the Income Tax Act, you get Tax Deduction (Tax Benefit under 80C) on giving proof of your many investments, there is an advantage of investing in such, but there are many taxpayers, who invest due to their economic status. If they are unable to do so, how can they save tax?
It is a matter of relief that such taxpayers Means of saving tax have also been found for them, in which they do not need to invest separately to save tax (How to save tax with zero investment). They can get tax exemption even by showing some of their expenses, that too in a legal way.
Where will the tax be saved without investment? (Tax Saving Tools)
1. HRA or House Rent Allowance (Tax Deduction on HRA)
If you live in a rented house, then you have the most primary tool to save tax. A part of your salary goes towards renting accommodation. You get tax exemption on HRA under Section 10(13A) of Rule 2A of the Income Tax Act, 1961. In tax deduction, HRA is partially as well as fully tax exempt.
2. Education Loan (Tax Deduction on Education Loan)
Although you do not get tax exemption on loan, but you get exemption on education loan. Education loan provides coverage for your higher education expenses and loan repayments. Under section 80E of the IT Act, you get tax exemption on the interest paid on education loan (tax deduction on education loan interest). That is, you can claim tax exemption on the amount spent from your pocket to repay the loan installments. When you claim a deduction on the total interest payable, the same amount is reduced from your overall gross income. It gets less.
3. Home Loan (Tax Deduction on Home Loan)
You also get tax deduction on housing loan. You have to repay the principal amount along with interest on your loan, that too within the end of the loan tenure. Under Section 24(b) of the Income Tax Act, if you are repaying the loan for the house in which you are living, you can get a tax exemption of up to Rs 2 lakh.
On the other hand, if you buy an under-construction house property, you can claim tax exemption on it only after the completion of the construction work. On the other hand, if you have bought a fully constructed house, then you can claim tax deduction on home loan repayment immediately on the interest paid on the housing loan.
4. Tax Deduction on Children’s Tuition Fees, Education Allowance, and Hostel Allowance
If you have children, who are studying, then you can also claim tax deduction on some of their education expenses. You can claim exemption on your child’s tuition fees, hostel expenses, education allowance. Under Section 10 of the IT Act, you get the option to claim them. Let us tell you that you can claim a rebate of Rs 1,200 per annum on the expenses of children and Rs 3,600 per annum on hostel expenses of maximum two children.
