Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
4 Deductions to Help You Save Tax - Outside View by PersonalFN
4 Deductions to Help You Save Tax

Most individuals are aware of the popular tax deductions in Section 80C, but there are other useful deductions that can help you as a taxpayer, to pay less tax. This will give you a higher investible surplus towards your financial life goals.

Let's see what these are.

  1. Section 80D

    This is probably the most well known section after 80C. In Sec 80D you can claim a deduction for health insurance premiums paid, to the extent of Rs. 15,000 for yourself (either as an individual policy or a family floater) provided you are under 60 years of age. You can also avail a deduction of Rs. 20,000 (over and above your own Rs. 15,000) if you are not a senior citizen but your parents are and you are paying for them. If you are a senior citizen i.e. above 60 years of age, your deduction goes up to Rs. 20,000.

    When buying a health insurance policy, be sure to buy the right Mediclaim policy, don't just buy whatever the agent sells because you want the tax deduction.

  2. Section 80DD and Section 80DDB

    These are 2 sections that are not very well known.

    Section 80DD states that if you are incurring an expense on medical treatment of a handicapped dependent, you are eligible for a deduction of Rs. 50,000, or actual expense incurred, whichever is less. For severe handicap, the limit is Rs. 100,000. Deductions are permissible in either of the following cases:

    1. expense is incurred for medical treatment or rehabilitation of a disabled dependent

    2. expense is by way of premium paid for a medical policy that will benefit the dependent in case of your untimely demise

      Key Things to Note for Section 80DD are:

    3. You need to produce a disability certificate issued by the state or central government medical board in order to claim this deduction

    4. The insurance policy should be in your name with your dependent relative as a beneficiary in case of your demise

    5. If you outlive your dependent, the maturity value of the insurance payout is fully taxable in your hands.
    Section 80DDB states the following: If you have incurred expense on certain specified medical treatments either for yourself or for a dependent relative, that is not covered by a Mediclaim policy, a deduction up to Rs. 40,000 (or Rs. 60,000 for senior citizens) is allowed under Section 80DDB.

    If this expense is already being covered by a health insurance policy, then the deduction is not available.

    Diseases covered include Parkinson's disease, malignant cancers, neurological diseases, AIDS, chronic renal failure, hemophilia and thalassemia.

  3. Section 80G

    If you donate to certain charitable institutions you can avail a tax deduction. For some institutions you can avail a 100% deduction, for others you can avail a 50% deduction.

    National Defence Fund 100%
    Prime Minister's National Relief Fund 100%
    Prime Minister's Armenia Earthquake Relief Fund 100%
    Africa (Public Contributions - India) Fund 100%
    National Foundation for Communal Harmony 100%
    Any approved university or educational institution 100%
    Maharashtra Chief Minister's Relief Fund and
    Chief Minister's Earthquake Relief Fund
    Any fund set up by Gujarat State Government for
    providing relief to earthquake victims
    Jawaharlal Nehru Memorial Fund 50%
    Prime Minister's Drought Relief Fund 50%
    National Children's Fund 50%
    Indira Gandhi Memorial Trust 50%
    Rajiv Gandhi Foundation 50%
    *Amount deductible is capped at not more than 10%
    of your gross total income, after deductions made under Sec 80C to 80U (not including Sec 80G).

  4. Section 80E

  5. An education loan can help fund your child's higher education.

    If you have taken an education loan for either yourself or your child, you can claim a deduction under Section 80E for payment of the loan's interest. The entire interest paid on the loan can be claimed as a deduction. Remember, there is no tax benefit on repayment of the principal of the loan. The deduction is available for a period of 8 years including the year in which the loan repayment begins, and the next 7 years. It applies to courses in India and overseas, pursued after the Senior Secondary Examination from a recognized education board.

    Remember, a rupee saved is a rupee earned. Make the most of the tax deductions available to save your investible surplus and achieve your life goals faster.

PersonalFN is a Mumbai based personal finance firm offering Financial Planning and Mutual Fund Research services.

The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and have not been authenticated by any statutory authority. The author and Equitymaster do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. Please read the detailed Terms of Use of the web site.


Equitymaster requests your view! Post a comment on "4 Deductions to Help You Save Tax". Click here!


More Views on News

The Right Financial Advisor Is Around the Corner (Outside View)

Mar 10, 2016

An opportunity to find an impeccably trustworthy and competent financial guardian is in the offing.

Why financial planning should be dull and boring (Mutual Fund Corner)

Feb 29, 2016

Most financial planners come out as whiz kids who throw around financial jargon. But financial planning can be actually easy, provided one follows a disciplined approach.

What Are E-Wallets And How To Use Them (Mutual Fund Corner)

Feb 12, 2016

PersonalFN highlights the benefits of parking a portion of your expenses in e-wallets and using them efficiently.

Is Consumption Boom Over In India? (Mutual Fund Corner)

Feb 2, 2016

Mutual funds take a bearish call on the FMCG sector. The sector has started playing out due to a combination of slower growth and expensive valuations.

How to Find a Saint Amongst Sinners? (Mutual Fund Corner)

Feb 1, 2016

Ethical practices help build long lasting relationships, and healthy long-term business relationships are often mutually rewarding. But PersonalFN is of the view that the financial services industry in India seems to have forgotten this.

More Views on News

Most Popular

Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

Aug 7, 2017

The data tells us quite a different story from the one the government is trying to project.

A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

Aug 10, 2017

Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

Aug 8, 2017

Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

Signs of Life in the India VIX(Daily Profit Hunter)

Aug 12, 2017

The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

Aug 7, 2017

Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...


Become A Smarter Investor In
Just 5 Minutes

Multibagger Stocks Guide 2017
Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
We will never sell or rent your email id.
Please read our Terms