In the complex of tax-saving investments and deductions, there are always a few hidden treasures that escape everyone’s attention. Although most people can relate to mainstream things like life insurance premiums, provident funds and mutual funds under Section 80C of the Income Tax Act, there are some less known provisions of Section 80C that could give away benefits without any need for additional investments under the Old Tax Regime within the aggregate limit of Rs 1,50,000/-.

Read this blog to learn more about Section 80C and its benefits you may have missed claiming certain deductions in spite of your eligibility or may become eligible to claim such benefits in the coming years without investing any additional sum.   

Tuition Fees

If your children are in school, you are eligible to get deduction of "Tuition Fees" under Section 80C, whether the fees were paid at the time of admission or afterward, and as long as they were paid to any of the followings:

• any university situated within India,
• college situated within India,
• school situated within India
• other educational institution situated within India

However, the deduction in respect of such payment is permissible for the purpose of full-time education of two children of the individual. It has also to be noted that no deduction is permissible for the payments in nature of:

• development fees 
• donation 
• other payments in the nature of development fees donations, etc 

Payment for Purchase or construction of house

You may be aware about the deduction of interest on borrowed funds available under section 24(b) of the Income-tax Act in respect of a residential house purchased from the borrowed funds and you may also be availing such deduction. However, you may not be aware of the deduction permissible on payment of the principal amount under section- 80C. Let us understand the circumstances under which you can claim such deduction:

House purchased under Self financing scheme

Deduction is permissible in respect of payment of any instalment or part payment of the amount due or purchase of residential house under any self-financing or other scheme of any–

• development authority, 
• housing board or 
• other authority engaged in the construction and sale of house property on ownership basis; 

House acquired as member of co-operative Society or Shareholder of a Company

Deduction is permissible in respect of –

• any installment, or 
• part payment 

of the amount due to any company or co-operative society of which the individual is a shareholder or member towards the cost of the house property allotted to him. However, deduction is not permissible in respect of —

• the admission fee, 
• cost of share, and 
• initial deposit 

which a shareholder has to pay for becoming a shareholder of a company or a member of a co-operative society.

House purchased or constructed on Loan from Government, Financial institutions, etc

Deduction is permissible in respect of repayment of the amount borrowed by the individual for the purchase or construction of residential house from—

• the Central Government or any State Government, 
•  any bank, including a co-operative bank, 
•  the Life Insurance Corporation, 
•  the National Housing Bank, 
• any public company formed and registered in India with the main object of carrying on the business of providing long-term finance for construction or purchase of houses in India for residential purposes (which is eligible for deduction u/s 36(1)(viii)).
• any company in which the public are substantially interested, which is engaged in the business of financing the construction of houses, 
• any co-operative society which is engaged in the business of financing the construction of houses,

House purchased or constructed by Loan from the employer

Deduction is permissible in respect of repayment of the housing loan taken from the employer, where the employer is–

•  an authority established or constituted under a Central or State Act, 
• a board established or constituted under a Central or State Act,
• a corporation established or constituted under a Central or State Act.
• any other body established or constituted under a Central or State Act, 
• a public company,
•  a public sector company,
• a university established by law or a college affiliated to such university 
• a local authority or a co-operative society.

3. Stamp duty and registration for purchase of residential house

Deduction is permissible in respect of payment of -

•  stamp duty, 
• registration fee, and
• other expenses 

for the purpose of transferring a residential house purchased by the individual 

Conclusion

While seeking tax efficiency, it is important to look at every opportunity for tax savings. People can optimize their tax advantages by utilizing little-known clauses found in Section 80C without un-necessarily raising their financial burdens. 

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Note: The above deductions under section 80C are permissible under the Old Tax Regime and not under the new tax regime.