How to save Income Tax other than deductions under section 80

You can purchase a house and can claim interest on that loan as detailed below:

Deduction for Interest on Home Loan (whether property is self occupied or not self occupied) (U/S 24b) under the head of Income from House Property and Repayment of principal covered under section 80C also, will serve as one more cherry on the cake.

• Self occupied property:

Deduction is allowed for interest paid on housing loan up to Rs. 2,00,000/-.

• Not self occupied property:

There is no limit of deduction for interest paid on housing loan.

Company Car Lease policy is another good option for employees. Company will provide this option to their employee according to their grade. Best thing is that you don’t have to pay any down payment. You have to pay monthly lease amount which is to be deducted from your monthly salary. This scheme is very beneficial for those employees who come under the category of 30% tax bracket. Those employees who comes under 10% tax category will not be much beneficial. You have to remember that after completion of lease period you can buy car after paying residual value as per company’s lease policy.

House Rent Allowance exemption under section 10(13A) is allowed if he is getting House Rent Allowance  as part of salary and full fill below two conditions:

1. He has taken a residential accommodation in which he resides on rent.
2. He has not occupied such property in which he resides.

Even If you are staying in a home owned by your parents, you can pay rent and claim deductions under section 10(13A) least of the following:

1. Actual HRA Received
2. Rent paid minus 10% of Salary
3. 40% of salary if he resides in Non Metro City or 50% of salary if resides in Metro City.

The Joint Home loan is a best method to save tax for both, if you are paying interest on loan by amount exceeds of Rs. 2.00 lakhs then you can save tax individually.

For Example:

Solution: Deduction can be claimed individually as under:

In spite of above they can do other savings under section 80C, which has allowed maximum up to Rs. 1.50 lakh individually. Deduction under section 24 allowed maximum up to Rs. 2.00 lakh in respect of interest paid on home loan individually.

Employer’s contribution to NPS is tax free. However an employer can contribute up to 10% of (Basic salary + Dearness allowance). The Contribution by the employer is not included in tax deduction limit under section 80C, 80CCD (1) or 80CCD (1b). An employee can request to your employer to contribute such amount to reduce his tax burden.

You can give money to your parents of any amount. The amount given is not comes under any tax. If your parents are senior citizen, they can invest this amount in any of best saving schemes and earn interest thereon. The interest earned thereon is taxable in their hands not in your part. Senior Citizens can achieve benefit under section 80TTB for Rs. 50,000 in respect of interest income and also fall tax slab of Rs. 3,00,000,  with no tax liability.

You are Individual Resident, you have the option of being part of HUF (Hindu Undivided Family) An HUF has its own PAN number and separate Bank account number, which is operated by head of the family member i.e. Karta of HUF. In spite of above small amount of tax also can be saved through Leave Travel Allowance, Children Education Allowance, and Hostel Expenditure Allowance.