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Tax Saving/Planning Rules & Tips

Once earning starts next major step is to plan some savings and in such a way that tax is also saved. Planning your taxes means planning your investments systematically and methedologically to avail maximum possible tax benefits.

First part in tax savings is to be aware about all possible Deductions that can be claimed from your taxable income.

Most commonly claimed eligible deductions for tax saving are:
  • Deduction u/s 80C of upto ₹ 1,50,000,
  • 80CCD of upto ₹ 50,000 for NPS
  • 80D of upto ₹ 1,00,000 for mediclaim Insurance
  • 80TTA of ₹ 10,000 for Savings bank interest & for senior citizens 80TTB of ₹ 50,000 for interest on savings as well as deposit accounts &
  • 80G for donations to various Charitable Organisations
Apart from these common deductions, there are many other deductions applicable to specific individuals under given circumstances. Just have a look at them if they might be applicable to you.

I have outlined here all possible deductions common as well as some specific deductions. Check this out, I am sure it will help you plan your tax savings:

Avail entire limit of ₹150000 under Section 80C

To start tax planning,  just ensure that you have availed entire limit of 150000 under Section 80C. Tax deduction under section 80C inlcudes following investments & expenses:
  • Investment in PPF, NSC, Life Insurance Premium, Equity Linked Savings Schemes (ELSS), SSA and other tax saving schemes.
  • House Loan Repayment - Only principle part of loan installment
  • Tution fee of two children etc.
When we are discussing about Section 80C, lets read in detail about various investment options for Section 80C:

PPF-Public Provindent Fund - Everything about PPF-Read here

NSC - National Savings Certificate - Know about Pros & Cons of NSC

Equity Linked Savings Scheme-ELSS

Sukanya Samriddhi Account- "Beti Padhao Beti Bachao"

Tax Saving Fixed Deposits

Deduction for Interest on House Loan upto ₹2,00,000

Buying a house is a good option as it brings many benefits. Apart from being a long term investments it has tax advantages too. Interest on home loan is eligible as deduction upto 2,00,000 and priniple part of home loan repayment is eligible for deduction under Section 80C within the overall limit of 1,50,000.

In case both husband and wife are taxpayer, better option is to purchase house in joint names with joint loan. This will result in tax benefit to both for principal repayment and Interest ( ₹2.00 Lac). In other words both the owners will get deduction of ₹ 2.00 Lac for interest i.e. total ₹ 4 lacs for owning a house jointly. 

Everything about Tax benefits of investing in a House Property

Deduction ₹50,000 for investment in NPS

To promote savings for retirement, an additional deduction of ₹50,000 was introduced from financial year 2015-16 for investments in National Pension Scheme(NPS). This deduction of ₹50000 is above the limit of Section 80C of 150000.

Read in detail about contribution to NPS and Deduction thereon of ₹50,000

Deduction for Mediclaim Insurance Premium & Preventive Helath Check ups u/s 80D

To promote health care and motivate people for medical insurance, Govt has provided deduction under Section 80D of upto ₹25,000 (₹50,000 in case of senior citizen) for medical insurance paid other then by cash & preventive health checkups. Medical insurance can be for self, spouse and depedent children.

Additional deduction of ₹25000 (₹50,000 in case of senior citizen) is allowed for medical insurance & preventive health check ups for parents.

80D also provides for deduction of max ₹50,000 for amount spent on medical treatment for self, family or parents but the treatment shall be of a senior citizen who is not having any medical/health insurance.

This deduction of Section 80D is in addition to ₹1,50,000 deduction of Section 80C.

Read complete analysis of Section 80D allowing you to avail deduction of ₹50,000 to ₹1,00,000

Short term Covid Specific Health Insurance-Corona Rakshak & Corona Kawach Plans

Deduction for Bank Interest u/s 80TTA & 80TTB

Saving Bank Interest is a taxable income but same is also allowed as deduction upto ₹10,000 or we can say there is savings bank interest upto ₹10,000 is not taxable.

Savings bank interest exempt upto ₹10,000 u/s 80TTA-Read in detail

For senior citizens this relief is extended to include deposit interests too. Interest from savings bank and from deposits upto ₹ 50,000 is not taxable for senior citizens.

Interest exempt for Sr. Citizens upto ₹50,000 u/s 80TTB-Read in detail

Other Deductions available under specific conditions or to specific individuals

Deduction for Medical treatment of specified disease u/s 80DDB

A Deduction U/s 80DDB is also there for expenses incurred on medical treatment of certain specified disease on self or dependent. 

Read in detail about Section 80DDB
Deduction for interest on Education Loan u/s 80E

There is a deduction U/s 80E of the Income Tax Act to promote higher education. The interest on loan taken for higher education of self, spouse or children is eligible for deduction u/s 80E.
Read in detail about Section 80E
Deduction for Rent paid u/s 80GG

If you are not in receipt of HRA, there is a tax relief provision for rent paid under Section 80GG, which is known to very few people.
Read in detail about Section 80GG
Deduction for Differently abled persons u/s 80DD & 80U
Further there is Income Tax Deductions to Differently abled persons U/s 80U & for maintenance of differently abled dependents u/s 80DD. Read in detail about the Income Tax benefits of 
Section 80U to Differently abled persons

Section 80DD for differently abled dependents

Deduction for Donations to approved Charitable Organisations u/s 80G

Donations to approved Charitable Organisations are eligible for 50% to 100% deduction. Generally Government regulated funds are eligible for 100% deduction without any limit on the amount of donation and other private charitable organisations which are approved for 80G deductions are eligible for 50% deduction of the amount of donation.

Donation to organisation (NGOs) which are not approved for 80G dedutions will not be eligible for 80G deduction.

To claim the dedction U/S 80G do ensure that your PAN is entered correctly at the time of making the payment for donation. Another important aspect is do keep the receipt of donation as you need to enter PAN & address of the organisation in your ITR for claiming deduction.
PAN & Address of CM Relief Fund-ASSAM
How to Donate to PMCARES Fund

PAN & Address of PMCARES

How to donate to Kerala Chief Minister's Distress Relief Fund

PAN & Address of Kerala Chief Minister's Distress Relief Fund
PAN & Address of PMNRF

How to donate to PMNRF online

Above is the complete list of possible deductions from taxable income. Write to Arpita for more information on various admissible deductions or for any othe issue at

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