The previous/common tax regime is likely to be helpful for some taxpayers, whereas it might not for others. It will depend upon the extent of earnings of the person.

Because the monetary yr 2020-21 is about to finish right now, it’s time to research the tax-saving investments one can avail to save lots of taxes within the present tax yr until thirty first March 2021. The federal government has launched the brand new tax regime w.e.f. 1st April 2020 and taxpayers who meet sure situations got the choice to pick out a simplified tax regime that provides decrease tax charges.

“The previous/common tax regime is likely to be helpful for some taxpayers, whereas it might not for others. It will depend upon the extent of earnings of the person. One can select the brand new regime the place the charges are decrease. Nonetheless, sure exemptions and deductions are usually not obtainable which might proceed with the common previous regime. In case a person has opted for the previous tax regime, one can declare deductions of as much as Rs 1.5 lakh below Part 80C below tax provisions,” says Sudhakar Sethuraman, Accomplice, Deloitte India.

Nonetheless, when you’ve got already exhausted the deduction restrict of Rs 1.5 lakh below Part 80C, there are additionally some alternatives/choices obtainable to you aside from 80C investments.

“With a number of funding merchandise, small saving devices, insurance coverage insurance policies, pension schemes, residence mortgage repayments, EPF contribution, and so forth. crowding Part 80C, taxpayers typically are inclined to exhaust the deduction restrict of Rs 1.5 lakh below this Part fairly simply. Such taxpayers ought to think about tax deductions and exemptions obtainable below the Revenue Tax Act to scale back their tax legal responsibility,” says Sahil Arora, Director, Paisabazaar.com.

Allow us to check out a few of such tax-saving choices you might think about apart from these obtainable below Part 80C:

1. Part 80CCD (1B): Extra deduction for NPS investments

Part 80CCD (1B) permits an extra tax deduction of as much as Rs 50,000 on contribution in NPS Tier I Account. This deduction is over and above the deduction obtainable on contribution of as much as Rs 1.5 lakh within the NPS Tier I account below Part 80C.

2. Part 80D: Medical health insurance premium

Part 80D permits tax deduction of as much as Rs 25,000 on medical insurance premiums paid for self, partner and dependent youngsters. You possibly can avail an extra deduction of as much as Rs 25,000 on medical insurance premiums paid in your mother and father beneath 60 years of age. A better tax deduction of as much as Rs 50,000 will be claimed for paying medical insurance premium for folks above 60 years.

3. Part 10(13A): HRA exemption by paying hire to folks

Part 10(13A) permits tax deduction on the HRA part of wage to these dwelling in rented lodging. Taxpayers dwelling with their mother and father within the lodging owned by their dad or mum(s) can even declare this deduction in the event that they pay hire to their mother and father.

“Observe that you need to pay hire to the dad or mum proudly owning the property. Father or mother receiving the hire quantity ought to disclose the rental earnings whereas submitting his or her IT returns. Guarantee to keep up correct report and documentation of paying hire to your dad or mum within the type of hire receipts, hire settlement and paying the hire by means of financial institution transfers. Doing so will hold you ready for scrutiny, if any, by the tax officers,” says Arora.

4. Part 80GG: Deduction on hire for these not receiving HRA

Part 80GG permits self-employed and salaried people not receiving HRA as a part of their wage to avail tax deduction on the hire paid for his or her lodging. Nonetheless, the deduction obtainable below this Part has been capped at Rs 5,000 monthly or 25% of 1’s whole earnings for a yr or precise hire paid in extra of 10% of 1’s whole earnings, whichever is decrease.

5. Part 80DDB: Deduction for medical remedy of particular illnesses

Part 80DDB permits taxpayers to say deduction on the quantity spent on treating particular illnesses for self or dependent member of the family. These illnesses are talked about in Rule 11DD of IT Act and embody illnesses like AIDs, power renal failure, haemophilia, malignant most cancers, thalassaemia and different neurological illnesses. The deductions will be claimed solely on the submission of related prescriptions from the listing of specialists talked about in Part 80DDB.

“Whereas the deduction allowed on the quantity spent on treating these beneath 60 years of age has been capped at Rs 40,000, the deduction allowed on the quantity spent on treating senior residents can go as much as Rs 1 lakh,” says Arora.

Alternatives/choices obtainable to people aside from 80C investments:

(Desk by Deloitte India)