Source | http://www.financialexpress.com : By Sanjeev Sinha
This is the tax-saving season and during this time most people’s attention usually remains focused on availing the Section 80C deductions of up to Rs 1.5 lakh. Because of this, taxpayers tend to overlook many other tax benefits they are eligible for and, thus, end up paying higher taxes to the government . However, being aware of these less-popular tax deductions would not only help you reduce your income tax outgo, but also the quantum of investment you need to make to avail tax breaks under the Section 80C of the Income Tax Act, 1961. Here we are taking a look at some of such deductions which will help you save more tax:
1. Deduction for rent paid in case of self employed
Under Section 80GG of the Income-Tax Act, 1961, an individual is allowed for deduction in respect of rent paid by him for his own residence. The amount of deduction that can be claimed is the least of rent paid less 10% of his total income; 25% of his total income and Rs 5,000 per month. However, “to claim this deduction, the individual should not have income for which exemption can be claimed under section 10(13A) and neither the individual, spouse of the individual or minor child of such individual should own accommodation in the place of the individual’s employment. Further, the individual should not have any self-occupied residential accommodation,” says Akhil Chandna, Director, Grant Thornton India LLP.
2. Deduction in respect of interest on loan taken for higher education
An individual can claim deduction under Section 80E of the I-T Act with respect to interest paid towards loan taken for pursing higher education (any course of study after passing the senior secondary education) either for self or for relative, i.e. spouse, children or student for whom the individual is a legal garden. This deduction can be claimed for a period of 8 years beginning from the year of repayment of the loan.