Income Tax Saving Tips: 5 lesser-known ways to save income tax

Income Tax Saving Tips: January is the month when companies ask to submit Income Tax proof from their employees. Many taxpayers in the old tax regime know about various tax saving tools, such as those under Section 80 C of the Income Tax Act, that can help them save tax a great deal. But many of them have made no investment.

When their companies ask them to submit investment proof, they realise how important was it.

In this write-up, we will tell you about some unconventional ways of saving tax which may not be popular among taxpayers, but may help save tax a great deal.   

1- Pay house rent to your parents

If you live with your parents and are not able to claim HRA, you can claim HRA by paying rent to your parents.

Under Section 10(13A) of the Income Tax Act, you can get tax deduction on HRA by showing your parents as tenants.

However, if you are taking any other housing tax benefit, you will not be able to claim HRA.

2- Give interest to parents

If your parents are in a low tax bracket or they are not taxed, you can take a loan from them for household expenses and pay interest on it.

However, to get tax exemption, do not forget to get an attested certificate of interest payment.

If you are not able to provide this proof, you will not get tax exemption.

You can get this tax exemption under Section 24B of Income Tax.

Under this, the maximum discount that can be availed is Rs 2 lakh.

3- Tax exemption on pre-nursery fees

Even if your child is small and he is in playgroup, pre-nursery or nursery, you can still get tax exemption on their fees.

Although this tax benefit was implemented in 2015 itself, it did not become as popular as the school tuition fee deduction became.

You can get this exemption under Section 80C and on the fees of a maximum of two children.

4- Take health insurance for parents or wife and children

You can save your taxes while also taking care of your parents' health.

If you take health insurance for your parents, you get tax exemption on the premium amount.

You will get tax exemption on premium up to Rs 25,000 on health insurance of parents below 65 years of age.

If your parents are above 65 years of age, you will get the benefit of tax exemption up to Rs 50,000.

5- Tax exemption on medical expenses of parents

You can also get tax exemption on the medical expenses of your parents.

However, for this, it is necessary that your parents' age should be 60 years or more.

At this age, they often have to bear a lot of medical expenses, on which you can get tax exemption under Section 80D.

Under this, you can get tax exemption of maximum Rs 50,000.