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Now that we are inching closer to the end of this financial year, people have begun worrying about filing their taxes and getting the most out of their returns. Sections 80C, 80D, and HRA emerge to be everyone’s favourites for the old tax regime. In this blog, let us explore the three sections that help you with deductions to ensure your taxable income is as low as possible.

Section 80C: your investment deductions

Section 80C lets you invest up to Rs. 1.5 lakh per year in various instruments, slashing your taxable income and boosting your long-term wealth. Here are those instruments.

  • Provident Fund (PF): Your salary's best friend, offering attractive returns and retirement security. Invest up to 12% of your basic salary and watch your deductions soar.
  • Equity Linked Savings Schemes (ELSS): ELSS offers market-linked returns with tax benefits. However, you should note that there is a minimum of 3 years of lock-in period to reap the rewards.
  • Public Provident Fund (PPF): PPF boasts guaranteed returns and tax-free maturity, but it comes with a 15-year lock-in period.
  • National Pension Scheme (NPS): NPS helps build your retirement corpus while saving taxes. Contribute up to 10% of your salary and enjoy additional tax benefits under Section 80CCD(1B).

Section 80D: your health shield

Section 80D helps protect your health and your wallet. You can claim deductions for premiums paid towards the following things.

  • Your own health insurance: Stay proactive and secure up to Rs. 25,000 in deductions.
  • Your spouse's health insurance: Extend the shield to your partner and claim an additional Rs. 25,000.
  • Your parents' health insurance: Be a filial Falcon and claim deductions for their premiums up to Rs. 50,000 (Rs. 25,000 if below 60 years old).

HRA: your rent haven

HRA, or Housing Rent Allowance, provides a haven from exorbitant rent costs. If you're paying rent, rejoice! You can claim deductions based on the lowest of these three categories.

  • Actual HRA received from your employer.
  • 50% of your basic salary (40% if you live in a non-metro city).
  • Actual rent paid minus 10% of your basic salary.

Remember

  • Each deduction has specific rules and limits, so research to maximise your benefits.
  • Consulting a tax advisor is always wise, especially for complex situations.
  • Don't use fabricated receipts or fake documents – tax evasion is no crime-fighting strategy!

Tax season takeaway

With 80C, 80D, and HRA as your allies, tax season can be a breeze. Use them wisely, invest in your future, and watch your tax liability shrink. Remember, knowledge is your ultimate superpower – use it to conquer your tax goals and build a financially secure future!

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