There are several provisions in the Income Tax Act of 1961, according to experts, that allow individuals to reduce their tax burden through various eligible expenses, even if they haven’t made specific tax-saving investments.
Here are key ways to save on taxes under the old tax regime:
Education Loan Interest
Section 80E provides deductions for interest paid on education loans taken for higher education. This deduction has no upper limit and can be claimed for up to eight years, starting from the year repayment begins.
Tuition Fees for Children
Individuals can claim a deduction for tuition fees paid to any educational institution in India, up to Rs 1,50,000 per year. This applies to the full-time education of up to two children and includes play-school, pre-nursery, and nursery classes. Note that development fees, donations, or similar expenses are not covered.
Donations to Charitable Organizations
Under Section 80G, donations to approved charitable organizations can be deducted from taxable income. Depending on the organization and specific conditions, the deduction can be either 50% or 100% of the donation amount. Donors must provide the recipient’s name, PAN, address, and donation amount when filing their tax return.
Medical Insurance Premiums
Section 80D allows deductions for premiums paid towards medical insurance for oneself, spouse, children, and parents. Individuals can claim up to Rs 25,000 per annum for premiums paid for themselves and their family, with a higher deduction of up to Rs 50,000 available for senior citizens.
Home Loan Interest and Principal
Under Section 24(b), individuals can claim up to Rs 2 lakh per year for interest paid on home loans for self-occupied properties. Additionally, the principal repayment qualifies for a deduction under Section 80C, though these benefits are available only under the old tax regime.
Rent Paid
Individuals living in rented accommodation can claim a deduction for the rent paid under Section 10. The deduction amount depends on the individual’s salary and city of residence.
These provisions offer various avenues for taxpayers to lower their tax liability. Consulting a tax expert or financial advisor is recommended to navigate these options effectively and understand the specific provisions applicable to your situation.
