Expenses that can help you in Saving Income Tax [Income Tax Deductions]

Print Friendly, PDF & Email

Expenses that can help you in Saving Income Tax [Income Tax Deductions]

We all know that we can take deductions u/s 80C and can save our income tax. Many of us know that LIC, NPS, PPF etc. are common source of investment for saving tax and getting income tax deductions. What we don’t know is that there are some very common expenses done by us, that can actually help in saving Income Tax.

Through this article, we are going to discuss some of these expenses:

Expenses that can help you in Saving Income Tax [Income Tax Deductions]

School Fees or tuition fees paid for Children

All those paying school fees for Children can claim, deduction of this expense u/s 80C and can save their income tax.

As per Section 80C of income tax act one can take deduction of any amount paid as as tuition fees.

The conditions for getting this deduction are :

(a)  the amount should be paid to any university, college, school or other educational institution situated within India;

(b)  the amount should be for the purpose of full-time education of children of Tax payer.

(c) Any payment towards any development fees or donation or payment of similar nature will not be eligible for deduction.

Any parent who has made the payment of School Fees can take deduction u/s 80C in Income Tax. For Example : If a working couple has 3 children, and Father has made payment for tuition fees of one child and Mother has made payment for 2 children, both can claim deductions of amount paid by them in their respective income tax return.

Repayment of Home Loan [For Principle Amount]

Whenever we are making payment for EMI of home loan, there are 2 components in that EMI. One is of Principle and other is of Interest. Deduction of Interest part can be taken in Section 24 of Income Tax Act [Deduction from Income under House Property] and deduction of Principle Amount can be taken u/s 80C of Income Tax Act.

Please note that the property purchased should not be sold upto 5 years, otherwise deduction claimed is added back in the income of taxpayer.

Certain payments made for purchase or construction of residential house

Expenses like stamp duty, registration fee and other expenses for the purpose of purchase of house property are eligible for deduction u/s 80C income tax.

Other expenses include any other statutory expenses similar to stamp duty or registration charges incurred for the purpose of purchase of house property.

It doesn’t matter whether the taxpayer has taken the loan or not for purchasing the house, he is eligible for 80C deductions in these cases.

Re-Payment of loan taken form development authority, housing board or other authority for the purchase of house.

Deduction of Principal amount is allowed in case of Re-Payment of loan taken form development authority, housing board or other authority for the purchase of house.

So friends, these were some of the tax savings tips on how to save income tax in India. These are goods tax saving options for salaried individual as well whereby taxpayer can make tax saving investments under 80C.

Hope you like this article. For any query please comment in the comment box given below.

Compiled by CA Pratibha Goyal

Disclaimer: The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, I assume no responsibility therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not a professional advice and is subject to change without notice. I assume no responsibility for the consequences of use of such information. In no event shall I shall be liable for any direct, indirect, special or incidental damage resulting from, arising out of or in connection with the use of the information

Author Bio
Name : Admin
Qualification : Chartered Accountant
Company Name : Studycafe
Designation : Team Studycafe
State: Delhi
City : Delhi
Bio : You can also ask your queries by visiting your forum page. Post your queries by clicking on this link https://studycafe.in/forums

You Might Also Like

Leave a Reply

Your email address will not be published. Required fields are marked *