6 Ways to Save Tax Without Making Investments

While many are familiar with tax-saving investments like life insurance, NPS, PPF, ELSS, and Sukanya Samriddhi Scheme, fewer people realize that there are ways to reduce your tax liability without making any specific investments. The Income Tax Act, 1961, offers several provisions that allow individuals to save tax on their regular expenses.

Here are six ways to save on taxes without investing:

1. Tuition Fees for Children

Under Section 80C, you can claim a deduction of up to ₹1.5 lakh on tuition fees paid for your children’s full-time education. This applies to schools, colleges, and other recognized institutions in India. The deduction covers only tuition fees and excludes expenses like development fees or donations. Notably, this benefit extends to up to two children and includes pre-nursery, nursery, and playschool fees.

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2. Donations to Charitable Organizations

If you donate to approved charities, you can claim deductions under Section 80G. Depending on the organization, the deduction is either 50% or 100% of the donation amount. To claim this, you’ll need to provide the recipient’s details, such as name, PAN, and address, when filing your tax return.

3. Medical Insurance Premiums

Section 80D allows deductions on premiums paid for medical insurance. You can claim up to ₹25,000 per year for yourself, spouse, and children. If you’re paying for senior citizen parents, the limit goes up to ₹50,000. This deduction helps secure health coverage while also reducing your tax liability.

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4. Home Loan Interest & Principal Repayment

Section 24(b) offers a deduction of up to ₹2 lakh per financial year on interest paid for home loans on self-occupied properties. Additionally, the principal repayment is eligible for deduction under Section 80C, offering further tax savings under the old tax regime.

5. Interest on Education Loans

Section 80E provides tax relief on the interest paid for education loans taken for higher education. You can claim this deduction for up to eight years, starting from the year you begin loan repayments. There’s no upper limit on the amount of interest you can claim during this period.

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6. Rent Paid

For those who live in rented accommodation, Section 10 offers deductions on the rent paid, even if you do not own a home. The deduction amount is based on your salary and city of residence, providing tax relief for non-homeowners.

These provisions help individuals reduce their tax burden without needing to make any additional investments. However, consulting a tax expert is recommended to understand how these options apply to your specific situation.