Section 80C is just the beginning for optimizing your tax liability in India. Here’s how you can boost your deductions legally, using provisions well beyond the Section 80C cap.
1. Increase Your National Pension System (NPS) Contributions
Section 80CCD(1B): You can claim an additional ₹50,000 deduction per year by contributing to an NPS (Tier I) account. This is over and above the ₹1.5 lakh limit under Section 80C.
Section 80CCD(2): Employer’s contributions to NPS (up to 10% of your basic salary + DA for private sector, and up to 14% for government employees) are deductible—this doesn’t count towards your 80C limit.
2. Health Insurance Premiums—Section 80D
Claim deductions on premiums paid for health insurance for yourself, family, and parents.
Up to ₹25,000 for self/family (₹50,000 if any insured is a senior citizen).
Up to ₹50,000 more for insuring senior citizen parents.
You can also claim up to ₹5,000 for preventive health checkups as part of the overall limit.
3. Home Loan Interest—Section 24(b)
Deduct up to ₹2 lakh per year on the interest paid for a self-occupied house property.
For let-out properties, the entire interest paid may be deductible subject to certain conditions.
4. Education Loan Interest—Section 80E
Deduct the full interest paid on an approved education loan for up to 8 consecutive years. There is no upper limit on the deduction amount.
5. House Rent Allowance (HRA)
Claim HRA if you live in rented accommodation—calculate based on your salary, rent paid, and city of residence.
Ensure you keep rent receipts and landlord PAN (where applicable).
6. Donations—Section 80G
Get deductions for donations to registered charities and relief funds. The deduction can range from 50% to 100% of the donation amount, depending on the organization and limits.
7. Savings Account Interest—Section 80TTA/80TTB
Section 80TTA: Deduct up to ₹10,000 of interest earned on savings accounts (for individuals and HUFs under 60).
Section 80TTB: Senior citizens can claim up to ₹50,000 on savings and fixed deposit interest.
8. Standard Deduction
All salaried employees and pensioners can claim a flat standard deduction (amount subject to annual budget announcements) from their total income, no documentation needed.
9. Other Useful Deductions
Leave Travel Allowance (LTA): Can be claimed for travel expenses incurred on eligible domestic journeys, subject to rules.
Expenses for specific handicapped dependents (Sections 80DD/80DDB).
Deductions for rent paid if HRA isn’t received (Section 80GG).
Pro Tip
Choose the optimal tax regime before investing. The old regime allows you to stack up all these deductions and can significantly lower taxable income if you have multiple eligible expenses and investments.
Always maintain records and receipts for proof during tax filing. For advanced planning, consult a professional tax advisor.
Maximize your deductions by combining these legitimate strategies and ensuring you’re utilizing every provision that fits your financial profile.
