Navigating the intricacies of the Income Tax Act of 1961 can help taxpayers reduce their tax liabilities significantly, even without specific tax-saving investments. Here are some key ways to save on taxes under the old tax regime:
Interest paid on education loans taken for higher education is deductible under Section 80E. This deduction has no upper limit and can be claimed for up to eight years, starting from the year repayment begins.
Individuals can claim a deduction of up to Rs 1,50,000 per year for tuition fees paid to any educational institution in India. This applies to the full-time education of up to two children, including play-school, pre-nursery, and nursery classes. Note that development fees, donations, or similar expenses are not covered under this deduction.
Donations to approved charitable organizations are deductible under Section 80G. Depending on the organization and specific conditions, the deduction can be either 50% or 100% of the donation amount. When filing their tax return, donors must provide the recipient’s name, PAN, address, and donation amount.
Premiums paid towards medical insurance for oneself, spouse, children, and parents are deductible under Section 80D. Individuals can claim up to Rs 25,000 per annum for premiums paid for themselves and their family, with a higher deduction of up to Rs 50,000 available for senior citizens.
Interest paid on home loans for self-occupied properties is deductible up to Rs 2 lakh per year under Section 24(b). Additionally, the principal repayment qualifies for a deduction under Section 80C, though these benefits are available only under the old tax regime.
Individuals living in rented accommodation can claim a deduction for the rent paid under Section 10. The deduction amount depends on the individual’s salary and city of residence.
These provisions offer various avenues for taxpayers to lower their tax liability. Consulting a tax expert or financial advisor is recommended to navigate these options effectively and understand the specific provisions applicable to your situation.
By utilizing these strategies, taxpayers can optimize their returns and ensure compliance with the Income Tax Act, thus reducing their overall tax burden.
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