Tax SAving

Hello I am female from metro, earning R.s 45K per month. I have recently taken home loan and paying EMI of Rs. 13K per month since Jul 10. Apart i have opted for the 50K Life Insurance which is to support the home loan in case of the accidental death. I have Another insurance policies running since few years counting to Rs. 16K and 24 K as well .

Apart from these, Any other investment due or required for best tax saving? Regards & thanks in advance

asked Jan 27 '11 at 06:19 by sakhi 16113


There are various sections for tax saving.

Section 80 C : You can claim your existing investments/payments under section 80C (up to 1 lakh combined limit):
Home loan principal amount payment (only if you have got possession of house)
Life insurance (Home loan insurance - 50K and others 16K+24K=40K). If your employer is deducting EPF from salary, then that contribution will also be counted under 80-C savings.
Apart from these you can also invest in tax saving mutual funds, 5-year tax-saver bank Fixed deposits, PPF, NSC, New Pension Scheme (NPS) etc.

Sec 80D : Maximum deduction of up to 15,000 under mediclaim or health insurance offered by life insurers. An additional deduction of up to 15,000 for buying cover for dependent parents. Senior citizens can claim deduction up to 20,000.

Sec 80DD : Deduction of 50,000 for maintenance of a disabled dependent. If the disability is severe, the deduction amount will be 100,000.

Sec 80E : Tax relief on interest payments on education loan taken for higher studies for self, spouse or child.

Sec 80G : The eligibility is 50% or 100% of the donation amount subject to overall ceiling of 10% of your gross total income to certain funds and charitable institutions.

Sec 24 : The maximum limit is of 1.5 lakh on interest payments of a home loan for a self-occupied house. There is no ceiling on the amount of deduction if the house is let out or deemed to be let out.

Sec 80CCF : You can invest up to 20,000 in infrastructure bonds and claim a rebate as per your tax slab. This deduction is over and above the existing overall limit of up to 1 lakh under Section 80C, 80CCC and 80CCD.

If In-spite of home loan insurance taken, you could have taken a term insurance, that would have been better.

answered Jan 27 '11 at 13:16 by pankaj 5.0k317

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Hello Thanks for the detailed answer. But apart from the existing 90K investment in 80C, i can make another 10K only or those section 80D/ 80DD/ 80 E and other offers additional avenue for tax saving over and above 1L. Secondly, home loan insurance was the compulsion from loan lending bank, hence no option.
(Jan 28 '11 at 05:27) sakhi
To make 1 lac for 80-C, you can invest 10000 in tax saving mutual funds, 5-year tax-saver bank Fixed deposits, PPF, NSC, New Pension Scheme (NPS) etc. Apart from this (over and above 1 lac), you can save more by buying medical insurance (section 80D), doing donation (80G) or buying long term infra bonds (max 20k, section 80CCF). Bank un-necessarily push their insurance to get benefit from there. But one can deny getting these insurance as its not compulsory.
(Jan 30 '11 at 15:04) pankaj
Hi Pankaj, To my understanding, total tax exemption under 80C- 1 Lac 80D-Medical Insurance of 15k for self,15k for parents Infra bonds-20k Total Exemption under above case: 1.5 La. Am I correct? Please let me know my understanding. Regards, Raju
(May 20 '11 at 14:17) Vsn Raju B
in case of senior citizen parents, medical insurance exemption is upto 20k.
(May 24 '11 at 14:34) pankaj

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Asked: Jan 27 '11 at 06:19

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Last updated: Jul 29 '11 at 19:23