Income Tax-Saving Options Beyond Section 80C Limit

Income tax deductions on life insurance premium, an employee's contribution towards EPF (Employee Provident Fund), PPF (Public Provident Fund), children's tuition fees, pension plans, principal repayment on home loans and a host of other investment options are covered under Section 80C of the Income Tax Act.

Under Section 80C, the maximum tax exemption limit is Rs 1.5 Lakhs per annum. The various investments that can be claimed as tax deductions under section 80C are listed below;

• PPF (Public Provident Fund)
• EPF (Employees’ Provident Fund)
• 5 years Bank or Post office Tax saving Deposits
• National Savings Certificates (NSC)
• ELSS Mutual Funds (Equity Linked Saving Schemes)
• Children’s Tuition Fees
• Life Insurance Premium
• Sukanya Samriddhi Account Deposit Scheme
• SCSS (Post office Senior Citizen Savings Scheme)
• Repayment of Home Loan (Principal only)
• National Pension System
• NABARD rural Bonds
• Stamp duty charges for purchase of a new house

Many taxpayers exhaust the Rs 1.5 lakh tax deduction limit under Section 80C. Additional investment in the various options will not provide further tax benefits. Here are some of the sections under income tax laws, apart from Section 80C, that help in cutting down the income tax burden.

1) NPS ( National Pension Scheme )

Additional income tax deduction of Rs 50,000 is allowed for contribution to the National Pension Scheme (NPS) under Section 80CCD. This extra deduction of Rs. 50,000 on NPS increases the total deduction allowed under Section 80C and 80CCD to Rs. 2 lakh.

2) NPS Contribution Routed Through Employer.

Under the NPS corporate model, an employee can deposit the contribution directly or route the contribution through the employer he or she is working with. Employer's contribution to NPS up to 10 per cent of basic salary (plus DA) is allowed deduction under Section 80CCD (2). There is no cap for this deduction but the total deduction claimed for contribution by the employer should not exceed 10 per cent of the salary. 

3) Deduction of interest on housing loan.

Under Section 24B of the Income Tax Act, interest paid up to Rs. 2 lakh on housing loan is allowed as deduction from taxable income. On rented properties, the borrower can only claim deduction of up to Rs. 2 lakh per year after adjusting for the rental income. And the amount above Rs. 2 lakh can be carried forward for eight assessment years.

4) Deduction under Section 80EE

Under Section 80EE, an additional deduction of Rs. 50,000 is available over and above the limit of Section 24B on interest paid on home loans if the person is buying a house for the first time (the person must not own any other residential property on the date of sanction of loan).

5) Deduction under Section 80D

An individual can claim deduction of up to Rs. 25,000, if he or she is below 60 years of age, and Rs. 30,000 if above 60 years of age, towards medical insurance premium paid for self, spouse and children. Additional deduction of Rs. 25,000 is available if one has bought medical insurance for his parents. This deduction can go up to Rs. 30,000 if parents are above the age of 60.

6) Deduction under Section 80E

A taxpayer can claim deduction for interest paid on education loan for him, spouse or children. There is no upper limit on the amount of deduction.

7) Deduction under Section 80DD

If an individual has dependants who are differently-abled, he or she can claim deductions up to Rs. 75,000 for expenses on their maintenance and medical treatment under this section. This deduction can increase to Rs. 1.25 lakh in case of severe disability.

8) Deduction under Section 80DDB

An individual can claim deduction of up to Rs. 40,000 for treatment of certain diseases for self and dependants. The deduction can go up to Rs. 60,000 if the taxpayer is above 60 years and up to Rs 80,000 if above 80 years.

9) Section 80GG

If you don't receive HRA from employer and make payments towards rent, you can claim deduction under section 80GG towards rent that you pay. The deduction is lowest of the following:

(a) Rs 5,000 per month

or

(b) 25% of total income

or

(c) Rent paid less 10% of income

10) Section 80G Donations To Charity

Donations to charitable organisations are entitled to up to either 50 per cent or 100 per cent deduction but the highest deduction allowed is capped at 10 per cent of the donor's total income.

Budget 2018 proposes tax, other benefits for senior citizens

Budget 2018 proposes several tax benefits for the senior citizens. These include: increase in tax exemption limit for interest income from banks and post offices from Rs 10,000 to Rs 50,000 and increase in tax break on health insurance and medical expenditure under sections 80D and 80DDB. 

Both these would give a big relief to this category of tax payers as most senior citizens derive most of their income from bank FDs and post office schemes. 

Relief to Senior Citizens proposed:-

• Exemption of interest income on deposits with banks and post offices to be increased from Rs. 10,000 to Rs. 50,000.
• TDS not required to be deducted under section 194A. Benefit also available for interest from all fixed deposit schemes and recurring deposit schemes.
• Hike in deduction limit for health insurance premium and/ or medical expenditure from Rs. 30,000 to Rs. 50,000 under section 80D.
• Increase in deduction limit for medical expenditure for certain critical illness from Rs. 60,000 (in case of senior citizens) and from Rs. 80,000 (in case of very senior citizens) to Rs. 1 lakh for all senior citizens, under section 80DDB.

• Proposed to extend Pradhan Mantri Vaya Vandana Yojana up to March, 2020. Current investment limit proposed to be increased to Rs. 15 lakh from the existing limit of Rs. 7.5 lakh per senior citizen.
• Standard deduction of Rs 40,000 for pensioners


The increase in tax exemption limit for interest income for senior citizens will be a big relief as this category derives most of its income from bank FDs and post office schemes. The increase in tax breaks for insurance and medical expenditure is also beneficial. 

Currently, the interest earned on a savings account, whether held with a bank (nationalised or co-operative) or post office, is allowed as deduction for a maximum of up to Rs 10,000 a year under section 80TTA. of the Income-tax Act was introduced for the first time in the financial year 2013-14. 

There had been expectations that the budget would increase the deduction limit under section 80TTA or expand the scope to include interest from bank fixed deposits under its ambit. 

Source:https://economictimes.indiatimes.com/wealth/tax/budget-2018-proposes-tax-other-benefits-for-senior-citizens-rs-50000-interest-income-exempted/articleshow/62458343.cms

Tips For An Awesome Retirement

Some of us have reached our golden years, and some of us have not. But these tips for an awesome retirement should be read by everyone. They have been collected from many a senior, each with his or her own piece of advice. Some you may know, some may surprise you, and some will remind you of what's important. 

 1. It's time to use the money you saved up.
Use it and enjoy it. Don't just keep it for those who may have no notion of the sacrifices you made to get it. Remember there is nothing more dangerous than a son or daughter-in-law with big ideas for your hard earned capital. 

Warning: This is also a bad time for an investment, even if it seems wonderful or fool-proof. They only bring problems and worries and this is a time for you to enjoy some peace and quiet.
 
2. Stop worrying about the financial situation of your children and grandchildren. 
Don't feel bad for spending your money on yourself. You've taken care of them for many years and you've taught them what you could. You gave them an education, food, shelter, and support. The responsibility is now theirs to earn their own money.
 
3. Keep a healthy life, without great physical effort.
Do moderate exercise (like walking every day), eat well, and get your sleep. It's easy to become sick, and it gets harder to remain healthy. That is why you need to keep yourself in good shape and be aware of your medical and physical needs. Keep in touch with your doctor and go for periodical medical check up even when you're feeling well. 
 
4. Always buy the best, most beautiful items for your life patner.
The key goal is to enjoy your money with your partner. One day, one of you will miss the other, when money will not provide any comfort. So, enjoy it together.
 
5. Don't stress over the little things.
You've already overcome so much in your life. You have good memories and bad ones, but the important thing is the present. Don't let the past drag you down and don't let the future frighten you. Feel good in the now. Small issues will soon be forgotten.

6. Regardless of age, always keep love alive.
Love your partner, love life, love your family, love your neighbor, and remember: "A man is not old as long as he has intelligence and affection."
 
7. Be proud, both inside and out.
Don't stop going to your hair salon or barber, do your nails, go to the dermatologist and the dentist, keep your perfumes and creams well stocked. When you are well-maintained on the outside, it seeps in, making you feel proud and strong.
 
8. Don't lose sight of fashion trends for your age, but keep your sense of style.
There's nothing worse than an older person trying to wear the current fashion among youngsters. You've developed your own sense of what looks good on you - keep it and be proud of it. It's part of who you are.
 
9. ALWAYS stay up-to-date.
Read newspapers, watch the news. Go online and read what people are saying. Make sure you have an active email account and try to sign up to a couple of social networks. You'll be surprised which old friends you may meet. Keeping in touch with what is going on and with the people you know, is important at any age.
 
10. Respect the younger generation and their opinions.
They may not have the same ideals as you, but they are the future, and will take the world in their direction. Give advice, not criticism, and try to remind them of yesterday's wisdom that still applies today.
 

11. Never use the phrase: "In my time". Your time is now.
As long as you're alive, you are a part of this time. Have fun and enjoy life. 

12. Some people embrace their golden years, while others become bitter and surly.
Life is too short to waste your days on the latter. Spend your time with positive, cheerful people, it'll rub off on you and your days will seem that much better. Spending your time with bitter people will make you older and harder to be around.
 
13. Do not surrender to the temptation of living with your children or grandchildren.
Sure, being surrounded by family sounds great, but we all need our privacy. They need theirs and you need yours. If you've lost your partner (our deepest condolences), then find a person to move in with you and help out. Even then, do so only if you feel you really need the help or do not want to live alone.
 
14. Don't abandon your hobbies.
If you don't have any, make new ones. You can travel, hike, cook, read, dance. You can adopt a cat or a dog, grow a garden, play cards, checkers, chess, dominoes, golf. You can paint, volunteer at an NGO or just collect certain items. Find something you like and spend some real time having fun with it.
 
15. Even if you don't feel like it, try to accept invitations.
Baptisms, graduations, birthdays, weddings, conferences. Try to go. Get out of the house, meet people you haven't seen in a while, experience something new (or something old). But don't get upset when you're not invited. Some events are limited by resources, and not everyone can be hosted. The important thing is to leave the house from time to time. Go to museums, go walk through a field. Get out there.
 

16. Be a conversationalist. Talk less and listen more.
Some people go on and on about the past, not caring if their listeners are really interested. That's a great way of reducing their desire to speak with you. Listen first and answer questions, but don't go off into long stories unless asked to. Speak in courteous tones and try not to complain or criticize too much unless you really need to. Try to accept situations as they are. Everyone is going through the same things, and people have a low tolerance for hearing complaints. Always find some good things to say as well.
 
17. Pain and discomfort go hand in hand with getting older.
Try not to dwell on them but accept them as a part of the cycle of life we're all going through. Try to minimize them in your mind. They are not who you are, they are something that life has added to you. If they become your entire focus, you lose sight of the person you used to be.
 
18. If you've been offended by someone, forgive them. If you've offended someone, apologize.
Don't drag around resentment with you. It only serves to make you sad and bitter. It doesn't matter who was right. Someone once said: "Holding a grudge is like taking poison and expecting the other person to die." Don't take that poison. Forgive, forget and move on with your life.
 
19. If you have a strong belief, savor it.
The key is not to waste your time trying to convince others. They will make their own choices no matter what you tell them, and it will only bring you frustration. Live your faith and set an example. Live true to your beliefs and let that memory sway them.
 
20. Laugh. Laugh A LOT. Laugh at everything.
Remember, you are one of the lucky ones. You've managed to have a life, a long one. Many never get to this age, never get to experience a full life. But you did. So what's not to laugh about? Find the humor in your situation.
 

21. Take no notice of what others say about you and even less notice of what they might be thinking.
They'll do it anyway, and you should have pride in yourself and what you've achieved. Let them talk and don't worry. They have no idea about your history, your memories and the life you've lived so far. There's still much to be written, so get busy writing and don't waste time thinking about what others might think. 

Now is the time to be at rest, at peace and as happy as you can be!

Source: Received as an email from a friend