All About Tax Saving Investments Other Than 80C

Section 80C is the most well-known provision of the Income Tax Act of 1961, under which a rebate of up to Rs. 1.5 Lakh is granted on several loan products and other investment tools. [Source]

However, you should also be aware of numerous other instruments aiming to reduce your taxable income. Such tax saving options other than 80C allows you to increase your annual savings through substantial income tax returns.

Since the Income Tax Act maintains several provisions for tax returns, an individual might not be aware of the regulations simultaneously. This can cause them to lose out on funds through redundant tax payments, reducing their annual savings respectively. 

We aim to help you keep track of your total taxable income by describing the various provisions which are tax-saving other than 80C in a nutshell. 

Income tax saving instruments other than 80C can be listed under the following acts:

1. Interest Income Generated from Savings Account Deposits

Section - 80TTA 

Limit – ₹10,000

Total interest income generated from savings account deposits can be claimed under Section 80TTA. Nonetheless, such deduction in taxable income is only limited to ₹10,000 annually.

If you maintain multiple savings accounts in different banks, the total cumulative interest is considered, and is taxed under ‘income from other sources’. 

If such interest income exceeds ₹10,000 in a year, only the excess amount over the cap is taxed at rates depending upon aggregate annual income. 

[Source]

2. Interest Component Paid Towards Education Loan

Section - 80E

Limit – No limit

Income spent to meet the interest component of education loans is not taxable under this section. Such an education loan can be unsecured or availed against collateral, depending upon the amount of funds required. 

However, it should be noted that such waivers are only granted for the first 8 years of loan repayment. Any income spent to meet the interest burden beyond this time is taxable. 

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Education loans eligible for such deductions have to be taken in the name of the respective individual and can be utilised to meet the higher education charges of either self, spouse, or children. It is one of the most popular tax saving schemes other than 80C. 

3. Premium Payment Towards Health Insurance Policies

Section - 80D

Limit - Depends as per specific conditions

4. Interest Component Paid Towards Home Loans

Section - 24(b)

Limit – ₹2 Lakh

Interest payments on a home loan can be removed from income tax calculations under this section. If the house is self-occupied,, a maximum of ₹2 Lakh can be claimed as a tax rebate on the interest rate, provided the construction is completed within five years of the loan tenure. 

If you choose to let out the purchased property on rent, then the interest deduction has no limit.

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5. Interest Component Paid Towards Home Loans for First Time Home-Buyers

Section - 80EEA

Limit – ₹50,000 above benefits from Section 24(b)

First-time home-buyers can claim additional interest benefits amounting to ₹50,000 above Section 24(b) on home loan EMIs, provided the property value is less than ₹45 Lakh.

However, no prior property should be registered under an applicant’s name while availing a home loan to be eligible for a tax rebate on total income spent on EMI payments under Section 80EEA. 

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6. Sum Assured on Maturity of Life Insurance Plans

Section - 10(10D) 

Limit – Entire maturity amount

The entire sum assured disbursed upon maturity of life insurance or untimely death of an insured person can be claimed for tax rebate under Section 10(10D).

However, such death benefit is exempted from tax calculations if it is availed after 1st April 2012, and total value premium charges are less than the full sum assured.

If the policy is availed before 1st April 2012, then the premium expenses should be less than 20% of the total sum assured to be eligible for waivers under section 10(10D).

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7. House Rent Allowance Provided Under Salary Break-Up

Section - 10(13A)

Limit – Specified conditions

This provision of the Income Tax Act caters to tax benefits under house rent allowance (HRA), provided your salary break up contains the HRA component. A total exemption granted under this scheme is the minimum value of the following:

• Actual annual HRA disbursed.

• 50% of yearly salary for those living in metro cities

• 40% of yearly salary for those living in non-metro cities

• Yearly rent paid minus 10% of basic income + DA 

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8. House Rent Allowance Component Not Included Under Salary Break-Up

Section - 80GG

Limit – Specified conditions

If your company does not include the HRA component in your salary break-up, you can claim exemptions on your total taxable income through Section 80GG. Such tax-saving investments other than 80C grants waivers up to the least value of the listed parameters:

• ₹5,000 per month. 

• 25% of the total annual income. 

• Annual rent minus 10% of the basic annual income. 

[Source]

9. Donations to Charitable Organisations

Section - 80G

Limit – Limited to 10% of gross total income

Any income donated to charitable organisations is exempt from tax calculations entirely under Section 80G. No limit on such tax waivers are levied provided transfers have been made through banks.

Any cash donations are exempt from tax calculations for up to ₹2,000. However, such contributions have to be made in registered charitable organisations.

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10. Donations Made Towards Scientific Research and Rural Development

Section - 80GGA 

Limit – No limit

If donations are made for scientific research and rural development, tax waivers on the same can be claimed under Section 80GGA.

100% of the income spent is eligible for such deductions, provided the transaction has been made through a bank account and is documented. 

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11. Donations Made Towards Political Parties

Section - 80GGC 

Limit – No limit

Donations made to political parties are also tax saving other than Section 80C. The entire contribution is waived from tax calculations, provided it was made through wired bank transfers.

Also, the political party to which such contributions were made has to be registered under Section 29A of the Representation of People Act (RPA) of 1951.

[Source]

12. Expenses Incurred Towards Treatment of a Disabled Person

Section - 80DD

Limit:

• ₹75,000 for 40%-80% disability
• ₹1,25,000 for higher than 80% disability

Individuals and Hindu Undivided Families (HUF) paying for the treatment and wellbeing of a disabled family member can claim exemptions on total income spent to cover such expenses under Section 80DD. 

The coverage limit is determined based on the percentage of disability, wherein people having 40-80% disability are eligible for deduction up to ₹75,000.

Families hosting a person having disability higher than 80% can claim up to ₹1.25 Lakh inclusive of all related expenses. Such claims are granted only to the family of such dependent individuals. 

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13. Income Tax Benefits Extended Towards Disabled Individuals

Section - 80U

Limit:

• ₹75,000 for 40%-80% disability
• ₹1,25,000 for higher than 80% disability

Disabled individuals can claim compensation in the form of tax waivers under Section 80U. Such disability has to be certified by a registered medical authority with at least 40% impairment.

Incapacitated individuals suffering from 40-80% disability can claim ₹75,000, while people suffering from higher than 80% disability are entitled to maximum ₹1.25 Lakh through tax benefits. 

[Source]

14. Expenses Incurred Towards Treatment of Individuals With Specific Disease or Disability

Section - 80DDB

Limit - ₹40,000 (₹1,00,000 for senior citizens)

People financing the treatment of dependent family members diagnosed with certain specific diseases can claim tax waivers on subsequent income spent.

A maximum of ₹40,000 is disbursed in such cases for individuals below the age of 60. Such waiver consequently increases to ₹1 Lakh for senior citizens (60-80 years) and super senior citizens (above 80 years). 

Such waivers can be received for the treatment of critical illness such as neurological diseases (causing 40% or higher disability), malignant cancers, AIDS, chronic renal disease, and haematological ailments.

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Thus, there are several ways for tax saving other than Section 80C, which can effectively increase your total wealth in the long term. Most such tools act as a comprehensive investment tool as well; allowing realising higher returns or reducing obligatory expenses.