Understanding Tax-Saving Instruments Beyond 80C
Paying taxes is a civic responsibility, but smart planning can help you reduce your tax outgo. Most salaried individuals are familiar with Section 80C of the Income Tax Act, which allows deductions up to ₹1.5 lakh through investments in ELSS, PPF, LIC premiums, etc.
However, that ₹1.5 lakh limit is often exhausted quickly, and many stop exploring after that. In reality, the Indian tax system offers several other deductions and exemptions beyond 80C, enabling you to optimise your tax savings further.
This blog explores some of the lesser-known but highly effective tax-saving instruments outside Section 80C that every taxpayer should know.
Why Look Beyond Section 80C of Income Tax Act?
Many people focus only on 80C, leaving other powerful tools untapped. Here’s why you should look further:
• As incomes rise, so do tax liabilities—you need more tools to minimise them.
• 80C has a fixed cap of ₹1.5 lakh, which is easily met by basic deductions like tuition fees or EPF.
• Using other sections allows for better tax planning and diversification of investments and expenses.
Top 8 Tax-Saving Instruments Beyond 80C
While 80C gets most of the attention, the Income Tax Act offers many other sections that can help you save more. Here are eight tax-saving avenues that go beyond the usual 80C deductions and are worth including in your financial planning.
1. Section 80D – Health Insurance Premium
Under this section, you can claim a deduction on health insurance premiums paid for yourself, your family, and even your parents.
• Up to ₹25,000 for self, spouse, and children
• An additional ₹25,000 for insuring parents (₹50,000 if they are senior citizens)
• Preventive health check-ups up to ₹5,000 can be included within the overall limit
2. Section 80E – Interest on Education Loan
If you’ve taken an education loan for yourself, spouse, or children, the interest paid qualifies for deduction under 80E.
• No cap on the amount
• Deduction available for 8 years from the year repayment starts
Ideal for those who are funding higher studies in India or abroad.
3. Section 80EE/80EEA – Home Loan Interest for First-Time Buyers
These sections provide additional deductions on home loan interest:
• 80EE: Up to ₹50,000
• 80EEA: Up to ₹1.5 lakh (conditions apply, like property value and loan sanction date)
These are over and above Section 24(b) and can result in significant savings.
4. Section 24(b) – Interest on Home Loan
For a self-occupied house, you can claim up to ₹2 lakh per year on interest paid on home loans. If the house is rented, the entire interest amount can be claimed (with some limits on loss set-off).
5. Section 80CCD(1B) – National Pension Scheme (NPS)
Get an additional ₹50,000 deduction by investing in NPS—over and above 80C limits.
• Great for long-term retirement planning
• Offers tax-saving + pension benefits
6. Section 10(14) – HRA and Other Salary Allowances
Salaried individuals living in rented accommodation can claim House Rent Allowance (HRA) exemption.
• Also includes LTA (Leave Travel Allowance), children’s education allowance, etc.
• Reduces your taxable salary without needing to invest
7. Section 80G – Donations to Charitable Institutions
Contributions to eligible NGOs and relief funds qualify for tax benefits.
• Some donations allow 100% deduction, others 50%
• Ensure the organisation has valid 80G certification
8. Section 80TTB – Senior Citizens’ Interest Income
Senior citizens can claim up to ₹50,000 deduction on interest earned from:
• Savings accounts
• Fixed deposits
• Recurring deposits
This is in place of 80TTA, which applies to non-senior citizens.
Strategy Tips to Maximise Tax Savings
• Stack deductions smartly — Combine Section 80C investments with benefits under 80D, 80G, 24(b), and 80CCD(1B) to expand your tax-saving potential.
• Insure family members and parents — You can claim a higher health insurance tax benefit of up to ₹50,000 for premiums paid towards their policy.
• Pay for insurance and home loans via digital modes — This ensures easy access to statements and helps maintain clean documentation during ITR filing.
• Keep all receipts, proofs, and declarations ready before filing — Especially for donations, insurance premiums, loan interest certificates, and rent receipts.
• Plan your investments early in the financial year — Avoid the last-minute rush and ensure maximum utilisation of available deductions.
• Utilise employer salary components wisely — Structure your salary to include HRA, LTA, and reimbursements to unlock additional exemptions.
• Consider long-term instruments like NPS — Contributions to NPS under 80CCD(1B) give an additional ₹50,000 deduction over and above 80C.
Tax planning doesn’t stop at 80C. Understanding and utilising other tax-saving instruments can make your financial planning more holistic and future-ready.
Don’t wait until the end of the financial year. Start exploring these options today, and if you haven’t secured your health yet, consider buying health insurance online.
