Life Insurance Premium:
Life insurance policy can be taken on own life, life of spouse or child, child may be dependent/independent, male/female. Major/minor, married/unmarried. Life Insurance Premium should not exceed 10% of sum assured. It is advisable not to mix investments with insurance, buy term plan or pure risk cover plans.
Public Provident Fund
Invest in PPF by opening account in own name or in the name of dependent minor child or in the name of spouse. Interest earned from PPF account is exempt from tax.
Amount towards tuition fees at the time of admission or otherwise to any university/school/college/educational institution in India for full time education of any two children. Full time education includes play school, pre-nursery and nursery classes.
Home loan includes two components principal and interest. Benefit of principal on home loan is covered under section 80C to the extent of Rs. 1.5 Lakhs subject to condition of not selling Home for 5 years from the date of possession. Benefit of Interest on Home Loan for self occupied property is available to the extent of Rs. 2 lakhs, for let out property without any limit.
Interest on Loan taken for Residential House Property
This is applicable from FY 2016-17 onwards, Conditions
Loan must be taken during 1-4-2016 to 31-3-2017
Amount of loan does not exceed Rs. 35 lakhs
Value of house property should not exceed 50 Lakhs
Assessee does not own any residential house property on the date of sanction of loan
If above conditions are satisfied then deduction of interest of upto Rs. 50,000 is available. No deduction is allowed for this interest under any other section.
Fixed deposits for 5 years or more eligible for tax saving investments. Interest earned on these Fixed Deposits is taxable.
Stamp duty or any registration fees paid for purchase of residential house property is eligible for deduction.
National Pension Scheme
Contribution towards NPS is eligible for additional benefit of Rs. 50,000 over and above maximum limit of Rs. 1,50,000 under section 80C.
Equity Linked Saving Schemes (ELSS)
Investment in certain mutual funds with lock in period of three years is eligible for deduction.
Medical Insurance Premium / Preventive Health Check-up
To avail benefit of this deduction payment must be made in cheque or through banking channel. Benefit of upto Rs. 25,000 is available and additional benefit of Rs. 5,000 is also available if medi-claim policy is taken on the life of a senior citizen.
Interest on Loan Taken for Higher Education
Loan can be taken for spouse or child, deduction is available for maximum period of 8 years, benefit of deduction is available from the year in which payment of interest starts. This benefit is also available for loan taken for foreign education.