With the New Year, comes new beginnings and fresh starts, but there’s one thing that follows us wherever we go… Income tax.
By now, your workplace has been clearly divided into groups.
The early birds have been investing money throughout the year in varied schemes for Tax Deductible Savings (TDS) declaration at work.
Then there’s the second group, the Procrastinators, which wants to dive for cover as there’s the awful task of planning last minute TDS.
And the third group, that’s where you should be moving to right about now: the who’re just about coming around to it.
Here’s how you can still claimi deductions under various sections of the Income Tax Act 1961.
Related: Non-80C items that help you save tax
- Life Insurance: The amount paid as premium on life insurance policies is eligible for a tax deduction of up to Rs 1,50,000. To claim this deduction, you have to submit the receipts of the premium paid during the current year to your employer. The receipts can be in your name or in the name of your spouse or children.
Related: Fine print of claiming tax benefit on life insurance premium decoded
- Public Provident Fund (PPF): PPF falls under the Exempt-Exempt-Exempt (EEE Tax Benefit) tax category. To ensure that your employer deducts the current amount of tax at source, you must furnish a copy of the passbook which clearly mentions your name and account type, or a copy of the stamped deposit receipt given to you by the bank.
Related: Comparison of PPF and life insurance: Which comes first?
- Medical Insurance: According to section 80D of the Act, the amount that you pay as premium for health or medical insurance is exempt from tax up to Rs 30,000 for senior citizens and Rs 25,000 for others. To claim this deduction, you must keep the copy of the premium receipts ready. With proper receipts, you are also eligible to claim a tax deduction for the amount paid towards preventive health checkups for yourself, spouse, dependent parents or dependent children.
Related: 5 Lesser known facts about tax benefits of health insurance
- Donations: To claim a deduction under section 80G on the donations that you made, you must have the receipts of these donations. However, you must keep in mind that you are not eligible to claim a tax deduction if the donation is made in cash and exceeds Rs 10,000.
- Tuition fees: Now you have one reason less to complain about the high school fees these days! If you have paid tuition fees towards educating one or two of your children, then you must furnish the copy of the fees slips to your employer to avail your tax benefit.
Related: Things you didn’t know about saving tax [Infographic]
- Equity Linked Savings Scheme (ELSS): These are mutual funds that double up as tax saving instruments. The amount that you invest in ELSS is eligible for deduction up to Rs 1,50,000 under section 80C. To substantiate your claim, you must furnish a copy of your investment certificate to your employer.
Related: Equity Linked Savings Schemes: High returns + tax savings (Part I)
- Sukanya Samriddhi Account: This account falls under the Exempt-Exempt-Exempt tax category. Neither the initial investment nor the interest accrued thereon is taxable. The amount received on maturity is also tax-free. To ensure that you avail yourself of this tax benefit, you must submit a copy of the bank account statement or a copy of the deposit challan to your employer.
- Tax-Saving Fixed Deposits: The amount invested in tax-saving fixed deposit is exempt from tax under section 80C. To claim this deduction, you will require a copy of your bank account statement or a copy of the deposit receipt.
So, this January, don’t hold back- save as much tax as you can!