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Avoid last-minute tax saving rush with these options

March, 30th 2018
Fast approaching tax-saving deadline (March 31) coupled with bank holidays giving you jitters? Worry, not. If you didn’t do tax planning in the beginning of the year, you can avoid this last minute rush by making your expenses turn to your advantage. Yes, under the income tax act certain expenses are eligible for tax breaks. Here’s a look at them. Health insurance premiums Any premium paid towards health insurance for self, spouse, dependent children is eligible for tax deduction under section 80D. The maximum deduction allowed is Rs 25,000 a year if you are below 60. Besides, any premium paid towards health insurance of parents too qualifies for tax breaks to the tune of Rs 25,000. In case parents are above the age of 60 years, the limit goes up to Rs 30,000. Tuition fees The tuition fee of your children can also cut your tax outgo. You can claim deduction for tuition fees for a maximum of two children within the overall limit of Rs 1.5 lakh under section 80C. However, it can be claimed by the one making the payment. Also, any payment towards development fees or donation to institutions is not included in the same. Home loan principal repayment The principal portion of your home loan EMI qualifies for tax benefit under section 80C. Look at your bank loan statement to know the total principal repaid by you. You can also claim tax benefit on partial repayment. The interest portion of your home loan is also eligible for tax breaks under section 24. The latter can be availed up to Rs 2 lakh for self-occupied property. In case, you are a first-time buyer, you can avail an additional deduction of Rs 50,000 under section 80EE. However, make sure to check if the loan amount is below Rs 35 lakh and value of house is lower than Rs 50 lakh. You can save tax with your education loan too. However, unlike home loan, you cannot avail tax benefit on the principal portion here. Only the interest portion is eligible for deduction from the total income under section 80E. However, tax deduction can only be claimed for loan taken for self, spouse or children.