There are a number of deductions available under various sections of income tax that help in lowering the taxable income. Most of us try to make the maximum use of Section 80C limit by investing in popular schemes such as Public Provident Fund (PPF), National Pension System (NPS) and Equity linked Saving Scheme (ELSS). However, there are other ways of saving taxes too that can help us reduce our tax outgo without making any investment.
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Tuition fees
A relatively lesser-known option to save tax under Section 80C is payments towards tuition fees that individual taxpayers can claim and not HUFs. This avenue covers for tax savings towards tuition fees paid on two children’s education.
Educational Scholarship
Under Section 10(16) of the I-T Act, any amount received as a scholarship for education is not taxable. It does not matter if the scholarship is granted by the government or from a private trust, according to tax experts.
Contributions made to political parties/charitable organizations
Individuals can also avail of a tax deduction if you make contributions to a political party or charitable organization. According to Section 80GGC of the Income Tax Act, any donation made to the acknowledged political parties/charitable organizations can be lawfully claimed for deduction.
Education loan
Students who have availed of an education loan to pursue their education are provided with a tax benefit on the repayment of the interest component of the loan under Section 80E. However, the deduction is provided only for the interest part of the EMI. There is no tax benefit for the principal part of the EMI.
ALSO READ | NPS investment and tax benefits
Rent paid
Under Section 80GG, a deduction can be claimed if taxpayers do not get a house rent allowance (HRA) as part of their salary or if they are a self-employed person. To avail of this deduction, they need to submit Form 10BA.
They can claim a deduction of up to Rs 60,000 under this section.
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