Various tax saving schemes in India for 2023
There are several tax saving schemes available in India that individuals can invest in to reduce their taxable income. Here are some of the popular tax-saving schemes for the year 2023:
Here's a quick overview of tax-saving options under various sections of the Income Tax Act in India:
- Section 80C: list of tax-saving investments categories under Section 80C of the Income Tax Act:
- Public Provident Fund (PPF)
- Equity-Linked Savings Scheme (ELSS)
- Tax-Saving Fixed Deposits (FD)
- National Savings Certificate (NSC)
- Senior Citizen Savings Scheme (SCSS)
- Unit Linked Insurance Plans (ULIPs)
- Life Insurance Premium
- Sukanya Samriddhi Yojana (SSY)
- Five-year Bank Fixed Deposits (FD)
- Employee Provident Fund (EPF)
- National Pension System (NPS)
- Tuition fees paid for children's education
- Repayment of Home Loan Principal Amount
- Post Office Time Deposit (POTD)
- Infrastructure Bonds
It is important to note that the maximum deduction limit under Section 80C is Rs. 1.5 lakh per annum.
- Section 80CCC: Section 80CCC of the Income Tax Act allows for a deduction on contributions made towards certain pension plans. The deduction is available to individuals and HUFs and is limited to a maximum of INR 1.5 lakhs per financial year. The income received from these pension plans is taxable.
- Section 80CCD(1): Section 80CCD(1) of the Income Tax Act provides a deduction for contributions made to the National Pension System (NPS) by an individual taxpayer. The deduction is limited to 10% of the individual's salary or income, subject to a maximum of Rs. 1.5 lakh per year.
- Section 80CCD(1B): Section 80CCD(1B) of the Income Tax Act allows individual taxpayers to claim an additional deduction of up to ₹50,000 in a financial year for contributions made towards the National Pension Scheme (NPS). This deduction is available over and above the deductions available under Sections 80C and 80CCD(1).
- Section 80CCG: Section 80CCG of the Income Tax Act offers tax benefits to first-time equity investors with an annual income of less than Rs. 12 lakhs. The maximum investment allowed under this section is Rs. 50,000, and the tax deduction available is 50% of the invested amount. The scheme is known as the Rajiv Gandhi Equity Savings Scheme.
- Section 80D: Taxpayers can claim deductions up to Rs. 25,000 per annum for health insurance premiums paid for self, spouse, and children. An additional deduction of up to Rs. 50,000 per annum is available for health insurance premiums paid for parents who are senior citizens.
Also Read: Tax-saving: Things to keep in mind
- Section 80DD: Section 80DD of the Income Tax Act provides a tax deduction for expenses incurred by a resident individual or HUF for the medical treatment and maintenance of a dependent with a disability. The deduction amount varies based on the severity of the disability.
- Section 80DDB: Section 80DDB of the Income Tax Act provides tax deductions for medical treatment expenses incurred by individuals or their dependents for certain specified diseases, such as cancer, chronic kidney disease, and neurological disorders. The deduction can be claimed up to a specified limit based on the age of the patient.
- Section 80E: Section 80E of the Income Tax Act allows individuals to claim deductions on the interest paid on an education loan for self, spouse, or children. Taxpayers can claim a deduction on the interest paid towards education loans for higher studies. The deduction is available for a maximum of eight years from the year of commencement of loan repayment or until the interest is fully paid off, whichever is earlier.
- Section 80EEA: Section 80EEA of the Income Tax Act provides an additional tax deduction of up to Rs. 1.5 lakh on interest paid towards a home loan for first-time homebuyers. The deduction is available over and above the existing deduction under Section 24B of the Act. This deduction is valid till the year 2022-23.
It is important to keep in mind that the eligibility criteria and maximum deduction limit for each section may vary, and taxpayers should consult a tax expert or financial advisor to make informed investment decisions.
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Income Tax Act