5 simple ways to save income tax

1. Section 80D
The Section 80D of the Income Tax Act, 1961 offers tax deduction up to Rs 25,000 for all Health
Insurance premiums paid for one’s own self, spouse and children. The tax exemption limit is
further raised to Rs. 30,000 for individuals with either parent of the assessee above 60 years of
age. Therefore, if you are paying Health Insurance premiums for yourself, children, spouse or
your parents, you can avail a tax exemption of Rs. 55,000. It is important to note that you cannot
claim deductions on premiums paid through cash.

2. 80TTA
The common perception is that the interest earned on Savings Bank Account is taxable. While
the interest in indeed taxable, Section 80TTA allows for a tax deduction benefit of Rs. 10,000.
You can claim for a tax deduction for interest up to Rs. 10,000 under Section 80TTA for savings
bank account. However, it is not offered for interest on other instruments like a bank Fixed
Deposit. So, effectively if you have earned an interest of Rs. 15, 000 in the financial year from
all your saving bank accounts, you will be paying tax on only Rs. 5000 after avail ing deduction
of Rs. 10,000 under Section 80TTA.

3. Section 2(28A)
When it comes to tax and home purchase, mostly the tax deduction on principal and interest on
the Home Loan is considered by borrowers. If you have taken any loan where the bank or the
financial intuition has charged you a loan processing fee, you can make use of Section 2(28A)
of the I-T act and avail tax deductions. Under Section 2(28A), a service fee charged while
borrowing money or any debt incurred as per Section 2(28A) is liable for t ax deductions. Since
the loan processing fees is considered as a service fee it can be rightfully claimed as a tax
deduction.

4. Section 80DDB
The Section 80DDB helps you avail tax deductions for expenses on medical treatment of
specified ailments like AIDS, cancer and neurological diseases for up to Rs. 40,000 for
individuals, Rs. 60,000 for senior citizens and Rs. 80,000 for age 80 and above.
5. Section 80G, 80GGA and 80GGC
Under Section 80G any donations made to various funds or temples can qualify for tax
deductions between 50 to 100%. The Section 80GGC of the I-T Act offers you tax deductions for
donations made to any political party with no upper limit on the sum. Donations made to
universities or institutions approved by the government under 35(1) (ii), 35(1) (iii), 35CCA,
35CCB offering scientific research qualify for deductions under Section80GGA