Many people try various ways to save income tax, such as health insurance, home loans, and donations, often focusing on Section 80C deductions. However, there are lesser-known methods that can significantly reduce your tax burden. Let's explore these hidden strategies.
Many rely on common tax-saving methods like Section 80C investments, home loan interest deductions, and health insurance. Discover lesser-known ways to reduce your tax burden, including tax benefits for children's education, rent paid to parents, and family medical expenses. Utilize these strategies for significant tax savings.
Did you know you can claim tax deductions on your child's playgroup, pre-nursery, or nursery school fees? This benefit falls under Section 80C. While introduced in 2015, it hasn't gained the same recognition as school education expense deductions. Parents can avail this for up to two children, offering a valuable opportunity for tax benefits on early education.
If your parents are in a lower tax bracket or don't pay taxes, borrow money from them for household expenses and pay them back with interest. This allows you to claim deductions up to Rs 2 lakhs under Section 24B. This smart strategy not only reduces your taxable income but also benefits your family.
Living with your parents doesn't mean losing HRA benefits. Under Section 10(13A), you can legally pay rent to your parents, declare them as landlords, and claim HRA. Maintain proper documentation like rental agreements and receipts. This doesn't apply if you already own a house.
Caring for your family's health can save you taxes. Claim deductions up to Rs 25,000 on health insurance premiums for parents below 65 under Section 80D. This limit increases to Rs50,000 for parents above 65. You can also claim deductions for premiums paid for your spouse and children. Senior citizens can claim medical expenses up to Rs 50,000 under Section 80D. These methods are legal and easy to implement with proper documentation.
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