If you think that it is necessary to invest for tax savings, then it is not so. There are various sections of the Income Tax Act which allow deductions. This reduces your tax liability.
However, most taxpayers make use of Section 80C of the Income Tax Act for tax-savings. Under this, there are about a dozen such options, in which tax-savings can be done by investing. These include PPF, NPS, ELSS, Life Insurance Policies etc. But, we are telling you about such ways to save tax, which do not require any kind of investment to take advantage of them.
Tuition fees
Individual taxpayers can claim deduction on tuition fees under section 80C of the Income Tax Act. This facility is not available to HUF. You can claim this deduction on the tuition fees of two children. Tuition fee refers to the total tuition fee to be paid in a financial year.
If you do a job, you have to submit the investment proof to the finance department of your company by the first or second week of January every year. You can take the Tuition Fee Payment Certificate from the school and give it at your office. This will result in good tax-savings for you.
Education scholarship
The scholarship amount received for education is exempt from tax under section 10(16) of the Income Tax Act. Tax experts say that the scholarship received from the government or any trust is exempt from tax.
Contribution to Political Party/Charitable Organizations
If you make any kind of contribution to any political party or charitable organization, then you can claim tax deduction on it. This deduction facility is available under section 80GGC of the Income Tax Act.
Education loan
If a student has taken an education loan, then a deduction can be claimed on the interest amount. This deduction can be claimed under section 80E of Income Tax. You just have to keep in mind that this deduction is available only on the interest part of the EMI. Deduction cannot be claimed on principal.
Rent paid
If you are employed and do not get House Rent Allowance (HRA), you can claim a deduction on the rent you pay. This deduction is available under section 80GG of the Income Tax Act. Self-employed individuals can also claim this deduction. To take advantage of this deduction, it is necessary to submit Form
