Wat other options are available for tax exemption other than section 80C?

The Income Tax laws allow all individuals who are assessed for income tax to claim exemption from income tax under the following heads.

1. Section 80C â€“ The section 80C of the IT laws provide exemption from income tax on amounts that are invested by the individual. This usually includes the amount the individual invests in certified instruments that are exempt from tax. They are:

a. PF â€“ Provident Fund (A portion of your salary is deducted by your employer as PF and would be remitted to the PF house that is maintained by the government of India. A maximum of 12% of your basic Salary is eligible for exemption from income tax)

b. PPF â€“ Public Provident Fund â€“ A maximum of Rs. 70,000/- per financial year.

c. ELSS â€“ Equity Linked Savings Scheme (Mutual funds)

d. NSC â€“ National Savings Certificate

e. KVP â€“ Kisan Vikas Patra

f. Life Insurance (Insurance provided by LIC & Other registered Insurance companies)

g. Tax Saving ULIPâ€™s â€“ Unit Linked Insurance Plans

h. Principal amount repaid as part of the Home loan

i. 5 year bank fixed deposits

A point to be noted here is that the sum total of all these components can be a maximum of Rs. 1,00,000/- per financial year.

2. Section 80D â€“ This section of the IT laws provide exemption on the premium paid towards Medical insurance of the individual, spouse & children and also dependent parents. The maximum eligible amount under this section is Rs. 15,000/- per financial year.

3. Section 80DD â€“ Exemption under sec 80DD is available to any individual who:

a. Incurs any expenditure for the medical treatment, training and rehabilitation of a disabled dependent Or

b. Deposits any amount in schemes of the LIC of India for the maintenance of the disabled dependent.

A deduction of Rs. 50,000/- is available to all individuals who incur any of the above two said expenditures. Where the dependent has a Sever disability a deduction of Rs. 75,000/- is allowed. An individual should furnish a copy of the issued certificate by the medical board constituted either by the Central government or a state government in the prescribed form, along with the return of income of the year for which the deduction is claimed.

4. Section 80DDB â€“ An individual, resident in India spending any amount for the medical treatment of specified diseases affecting him or his spouse, children, parents, brothers and sisters and who are dependent on him, will be eligible for a deduction of the amount actually spent or Rs 40,000, whichever is less.

For any amount spent on the treatment of a dependent senior citizen an individual is eligible for a deduction of the amount spent or Rs 60,000, whichever is less is available. The individual should furnish a certificate in Form 10-I with the return of income issued by a specialist working in a government hospital.

5. Section 80E - Under this section, deduction is available for payment of interest on a loan taken for higher education from any financial institution or an approved charitable institution. The loan should be taken for either pursuing a full-time graduate or post-graduate course in engineering, medicine or management, or a post-graduate course in applied science or pure science.

The deduction is available for the first year when the interest is paid and for the subsequent seven years. The maximum deduction that is available is Rs 40,000 a year (Inclusive of both principal and Interest)

6. Section 80U - It is deduction in the case of a person with a disability. An individual who is suffering from a permanent disability or mental retardation as specified in the persons with disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 or the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999, shall be allowed a deduction of Rs 50,000. In case of severe disability it is Rs. 75,000.

The Income tax assessee should furnish a certificate from a medical board constituted by either the Central or the State Government, along with the return of income for the year for which the deduction is claimed.

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