Tax

4 expenses to help you in tax-saving under section 80C

Have you incurred these?ThinkStock Photos
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Have you incurred these?
You must be aware that there are several tax-saving investments available under section 80C of the Income-tax Act, 1961, in notified schemes such as PPF, ELSS or insurance. But that's not it. There are also certain expenditures permitted under section 80C to help you save tax too.

If you have incurred any of the expenses mentioned below in the current financial year, then you can claim deduction up to a maximum of Rs 1.5 lakh. If the expenditure totals Rs 1.5 lakh or more, then you need not make any investment to fully exploit section 80C.
​Tuition fees of childrenGetty Images
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​Tuition fees of children
Any tuition fees paid, whether at the time of admission or thereafter to any university, college, school or other educational institution is eligible for tax deduction from your gross taxable income. Only fees paid for studies pursued full time can be claimed. This also includes fees paid for any play school activities, pre-nursery and nursery classes. Payment made as development fees, donation or of similar nature will not be considered as tuition fee. The institution has to be situated in India, it can be a government or private one.

Also read: Your tax-saving guide for FY 2019-20

This benefit is restricted to two children only, for each parent and will be available to the parent who has made the payment. If, say a couple has three children, then one parent can claim deduction the tuition fee paid for one child and the other parent can do so for the other two childre, Remember, any fees payment made for education of yourself or spouse is not available.
Home loan principal repaymentThinkStock Photos
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Home loan principal repayment
As a home loan buyer, section 80C can bring you relief. The EMI paid monthly by you has two components: Principal and interest. The total principal paid in a financial year can be claimed as a deduction by both individuals and Hindu Undivided Families (HUFs). One can get a loan certificate from the lending bank's branch or go online. This will show how much of the total EMI paid in a year was repayment of the principal amount borrowed.

Payment of interest can also be claimed as a deduction under section 24 and section 80EE subject to certain conditions. However, the deduction is available only in case of purchase or construction of house and not on loan taken for the purpose of repairs, alteration or addition to the house if completion certificate has been issued or if the house is occupied by the user or let out. The house property should not be sold within 5 years from the end of the financial year in which possession is obtained otherwise the deduction claimed earlier will be added back to your income in the year of sale.
Certain payments for the purchase/construction of residential house propertyThinkStock Photos
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Certain payments for the purchase/construction of residential house property
If you have bought a house, then there are certain charges that need to be paid apart from the cost of house. Stamp duty, registration fee and other expenses incurred for buying a house are eligible for deduction from gross total income in the financial year in which these expenses are incurred. Note that this is regardless of whether an individual has taken loan to acquire the property or not. Also, remember that any fees or deposit made to become a member of a co-operative society is not allowed as deduction.
Payment to development authority, housing board or other authority for the purchase of houseThinkStock Photos
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Payment to development authority, housing board or other authority for the purchase of house
If you have bought a house under the instalment finance scheme from a development authority such as the Delhi Development Authority (DDA) and are paying the instalment to DDA, then any amount paid towards principal repayment can also be claimed as tax deduction u/s 80C.
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