There is no doubt that tax saving is a priority for everyone who earns money. We all hate when there are deductions from our salaries in the name of income tax. We do whatever it takes to make sure that this is minimized. And when it comes to tax saving, Section 80C is a legend. This is the first thing which comes to our mind when we think about tax saving options.
There are multiple options inside section 80C that help us save tax. However, let us discuss five lesser known tax saving options which are ignored by most of us.
1) Stamp duty and registration charges
House is an essential commodity for all of us. In fact, it’s a priority more than a necessity. We all aim to have an own house before anything else. We start saving for it right from our first pay check. In the process of buying a house property, there are several charges associated with it. Stamp duty and registration charges are popular ones among the many involved. These charges can actually be claimed as deduction under Section 80C. Because of the high costs involved, sometimes, these can suffice the entire section 80C limit of Rs. 1,50,000.
2) Pension Funds
Retirement is a big topic for discussion in our country, especially with lot of companies moving towards defined contribution schemes rather than defined benefit schemes. Uncertainty looms over security for retirement phase. Pension funds help you a bit in securing your retirement life. These are schemes from insurance as well as mutual fund companies. Premiums invested in these schemes are eligible for deduction under Section 80CCC, which is a subsection of Section 80C. Many of the pension funds from mutual fund companies have performed better over the years. Pension funds from insurance companies have higher charges associated with them. Hence, you need to be careful while choosing them.
3) Five Year FDs
Fixed deposits are a popular investment option in our country. Not many of us are aware that FDs with a particular tenure are also eligible for tax deduction under Section 80C. Fixed deposits with a lock-in period of 5 years or 10 years are eligible for this. However, beware not to break the FDs since the tax deduction amount would be taxable in the year of doing so.
4) Tuition Fees
This is an inevitable expense for all parents. There is a clause in Section 80C which allows you to claim tuition fee expenses paid up to maximum of 2 children. This facility is available for tuition fees paid to college, university, school or any other educational institution. Fees paid for private tuitions or coaching institutes is not eligible, though.
If you are a senior citizen, this is one of the better investment options for you. Senior Citizen Savings Scheme or SCSS is a conservative scheme similar to a fixed deposit. It is a post office deposit scheme and can be opened by any individual aged 60 or more. The current interest rate offered on this scheme is 9.20% p.a.