All of us must spend money on tax-saving monetary avenues equivalent to Public Provident Fund (PPF), Nationwide Pension System (NPS), Nationwide Financial savings Certificates (NSC), tax-saving mounted deposit, life and medical insurance insurance policies, amongst others, in a bid to save lots of tax. Nevertheless, aside from these, there are another choices additionally that may assist us cut back our tax outgo with out making any funding.

Subsequently, if you happen to don’t need to make any further funding, you should utilize these choices for saving tax.

1. Take A Dwelling Mortgage

Taking a housing mortgage is without doubt one of the finest methods to save lots of tax. It offers a number of deductions. Ordinarily, you’ll get deductions as much as Rs 1.5 lakh on residence mortgage principal compensation beneath Part 80C, and as much as Rs 2 lakh on the curiosity compensation beneath Part 24B. Beneath 80C, you’ve got the choice of pre-paying the principal and earn exemptions as much as Rs 1.5 lakh and thus keep away from having to purchase extra tax-savers. Based mostly on the property you’ve purchased, the quantity you’re borrowing and the 12 months of your mortgage sanction, you may additionally be eligible for additional tax deductions of Rs 50,000 beneath Part 80EE or Rs 1.5 lakh beneath Part 80EEA in your mortgage curiosity compensation.

“Do notice, the Union Finances 2021 has proposed to increase the 80EEA tax profit by another 12 months; due to this fact, you’ll be able to declare this tax deduction profit if your own home mortgage to your first residence buy is sanctioned between 1 April 2019 and 31 March 2022. Different riders to get pleasure from 80EEA tax advantages embody the housing mortgage have to be taken from a monetary establishment or an HFC, the stamp obligation worth of the property shouldn’t be greater than Rs 45 lakh, the person taxpayer shouldn’t be eligible for 80EE tax profit and the carpet space of the property shouldn’t exceed 645 sq. ft. if it’s situated in a metropolitan metropolis and 968 sq. ft. if it’s situated in another metropolis or city within the nation,” says Adhil Shetty, CEO, BankBazaar.com.

2. Deductions For Medical Bills

Part 80D lets you declare deductions towards premiums paid in the direction of medical insurance insurance policies for self, partner, dependent youngsters, and dependent mother and father. It is best to completely purchase medical insurance for everybody in your loved ones, however even if you happen to don’t, you’ll be able to declare deductions as much as Rs 5,000 for bills incurred for preventive well being check-ups. Additionally, healthcare bills incurred by you as a senior citizen, or by you to your senior citizen mother and father, can even earn deductions as much as Rs 50,000 assuming the senior citizen shouldn’t be lined by medical insurance.

3 Deductions for youngsters’s tuition charges

Bills associated to youngsters’s schooling eat a significant portion of our earnings. Therefore, it makes loads of sense to maximise the tax advantages related to these prices. Mother and father can declare a tax deduction of as much as Rs 1.5 lakh beneath Part 80C for the tutoring charge paid for his or her youngsters’s schooling. Do notice that this profit applies to any full-time schooling plan imparted at any registered establishment like faculties, schools, and even pre-schools and nurseries. Nevertheless, this is applicable for the tutoring charge paid for as much as 2 youngsters per taxpayer (i.e. a pair consisting of two particular person taxpayers can avail this profit for as much as 4 youngsters). Additionally, this profit solely applies to the tutoring charge and never different funds like growth charge, late fee charge, and so on. Additionally, in case your employer offers youngsters’s schooling allowance and hostel bills allowance, you’ll be able to avail tax exemption on such allowances as much as Rs 1,200 p.a. and Rs 3,600 p.a., respectively, for as much as 2 youngsters.

4 Hike your EPF contributions with VPF

The Workers’ Provident Fund types the spine of retirement financial savings for numerous salaried people. Whereas they should save not less than 12% of their primary wage and dearness allowance as EPF, they’ll transcend this threshold (as a lot as 100% of their primary wage and DA) by way of the Voluntary Provident Fund scheme. VPF, because the identify suggests, is a voluntary contribution over and above the obligatory EPF contributions.

“Salaried people can attain out to their HR companions to know the way they’ll begin with their VPF contributions. Extra importantly, they’ll avail tax exemption advantage of as much as Rs 1.5 lakh beneath Part 80C for his or her EPF and VPF contributions. This risk-free funding scheme is at the moment providing an rate of interest of 8.5% p.a. which is greater than many than different tax-savers like PPF and 5-year FDs. However do notice withdrawing EPF and VPF corpus earlier than 5 years of whole service will appeal to a ten% TDS. Nevertheless, it’s advisable they struggle to not disturb their EPF and VPF as these funds are meant for post-retirement years,” says Shetty.

5. By paying hire

In case you are a salaried particular person and live in a rented lodging, then it can save you some tax by paying hire to the owner. For those who obtain a home hire allowance (HRA) out of your employer, then you’ll be able to declare an exemption for the hire paid as per provisions said in Part 10(13A) of the Earnings Tax Act. In case of different people and in circumstances the place no HRA is acquired by the worker, a deduction may be claimed as per Part 80GG of the I-T Act for the hire paid in respect of lodging occupied by the person for his personal residence as much as Rs 5000 per 30 days (topic to prescribed situations).