The Income Tax Act in India offers individual taxpayers many ways to save tax. You can invest your savings in long-term schemes to reduce taxable income. Certain expenses, such as rent, can also help you save on tax. If you’ve opted for the old tax regime, you have time until March 31st to declare your investments.
If you’re wondering how to save income tax under the old tax regime, continue reading!
Section 80C
This is one of the most popular sections of the Income Tax Act. It provides a blanket deduction for various eligible investments and expenses made by you during a financial year. The maximum deduction under this section is Rs. 1,50,000. The investments that are eligible under the section include,
- ELSS funds
- PPF
- NSC
- Tax-saving Bank FDs
- Senior Citizen Savings Scheme
- Sukanya Samridhi Yojana
The eligible expenses also include payments for home loan principal payments, children’s education, and life insurance premium payments.
Section 80D
This section includes deductions for premiums paid towards health insurance for yourself, your spouse, children, and dependent parents. The eligible deduction depends upon the age of the applicant and dependent parents.
Section 80 CCD
Investments under the Nation Pension Scheme (NPS) come under this section. It is a government-backed scheme that provides easy retirement solutions. You can save tax under sections 80C and 80CCD by investing in NPS.
The maximum investment in NPS under Section 80C is Rs. 1,50,000. Under Section 80CCD, you get an additional deduction of up to Rs. 50,000 if you meet all the eligibility criteria.
Section 80E
Interest paid on the education loan taken for your higher education, your spouse’s, or your children’s is eligible for deduction under Section 80E. It does not have a cap on the maximum deductible amount of interest paid during a financial year toward the education loan.
Section 80EEA
Section 80EEA was introduced by the government to help first-time homeowners. You have to meet all the eligibility criteria as per the provisions of Section 80EE and its extension, Section 80EEA to qualify for a deduction of up to Rs. 50,000 and Rs. 1,50,000, respectively.
Section 24
Section 24 offers a deduction on the interest paid on the home loan. The maximum deduction under the section is up to Rs. 2,00,000. This deduction is in addition to the deduction under Section 80C.
Section 80G
This section provides a deduction for any contribution or donation made by you during any financial year to a charitable institution, trust, or relief fund. The deduction is between 30% and 100% of the contribution made. It depends on the nature of the organization you donate to. All contributions are not eligible for deduction under this section. So you might have to verify its availability or applicability before making your contribution.
If you haven’t made tax-saving investments for the fiscal year 2023-24, don’t worry; you have until March 31. Investments made after the conclusion of FY24 will not be eligible to claim deductions under the old tax regime when filing the Income Tax Return (ITR) for FY24. A qualified cost accountant can help with the process. Keep reading our blogs for more such financial information.
