Income Tax alert! Top 5 money making options hat help you get tax benefit beyond Section 80C
Income Tax Calculator: Finance Minister Nirmala Sitharaman has presented the Union Budget 2021 leaving the income tax slab unchanged and not levying any additional tax on the earning individuals.
Income Tax Calculator: Finance Minister Nirmala Sitharaman has presented the Union Budget 2021 leaving the income tax slab unchanged and not levying any additional tax on the earning individuals. However, by leaving the income tax slab untouched, she also left people guessing as to which tax regime is good for the taxpayers — old one or the new tax regime introduced in the budget 2020? According to tax and investment experts, if the person is in the nascent phase of one's career and doesn't have a home loan to repay then the new income tax regime is better, however, if the person has availed a home loan and some other investments like National Pension System (NPS), then old tax regime is the best. they said that in the new tax regime, one will have to lose all tax exemption benefits available under Section 80C and some other sections of the income tax act. Below is the list of top 5 investment options that provide income tax exemption but not under Section 80C of the income tax act.
National Pension Scheme (NPS)
Under Section 80CCD, you can invest an additional Rs 50,000 in this scheme apart from the contribution of Rs 1,50,000 available under Section 80C. In short, you can claim a total deduction of up to Rs 2,00,000 in each financial year by investing in NPS. Photo: Pixabay
Interest payment of home loan
The payment of interest part of a home loan is eligible for tax benefit under Section 24 of the Income Tax Act, 1961. In case the property is occupied by the person taking the home loan, the maximum limit under this section is Rs 200,000. However, if you are not staying in the property and are rented out then there is no maximum limit, allowing you to claim the whole interest amount as a tax deduction. Photo: Pixabay
Interest payment of the home loan for first-time buyers
You can avail of a tax benefit of Rs 50,000 under Section 80EE if you are a first-time homeowner. This amount is the above the tax deduction of Rs 200,000 that can be claimed for home loan interest repayment under Section 24. The criteria to avail of this deduction are that the total value of the house should be below Rs 50 lakhs, and the loan amount should be Rs 35 lakhs or less. Furthermore, the home loan should have been sanctioned between 1st April 2016 and 31st March 2017. Photo: Reuters
Benefit under Section 80EEA for first-time buyers
If you are a first-time homeowner then you can claim a deduction of up to Rs 150,000 under Section 80EEA. This amount is above the tax benefit of Rs 200,000 for repayment of home loan interest under Section 24. The criteria to avail of this deduction are that the stamp duty value of the house property should be below Rs 45 Lakhs. Furthermore, the home loan should have been sanctioned between 1st April, 2019 and 31st March, 2020. Photo: Pixabay
Interest paid on loan taken for the purchase of an electric vehicle
Under Section 80EEB, you can claim a tax deduction of up to Rs 1,50,000 for the interest repayment for a loan taken for the purchase of an electric vehicle. To be eligible, the loan should have been sanctioned between 1st April 2019 and 31st March 2023. Photo: Courtesy NAREDCO