AMA: Last-minute tax-saving investments

With the deadline for tax-saving investments swiftly approaching on 31st March 2024, it’s important that you make informed decisions to maximise your tax benefits.

This is your last chance to explore strategies like tax harvesting, evaluate which regime is better for you and accordingly make tax-saving investments.

While investments in PPF, SSY, life insurance policies and ELSS funds can help you claim a deduction u/s 80C, you can also explore options like NPS which provides an additional deduction of ₹50,000. But before you rush to make any investment, you should consider multiple factors like the returns or interest you’d earn, lock-in period, withdrawal rules, and tax benefits.

Further, there are other deductions like 80D for your medical insurance premiums, 80G for any donations that you make, 80E for education loan and so on.

If you have any questions around tax-saving investments, deductions or which tax regime is beneficial for you, ask us on this AMA thread and we’d love to answer them for you.

Q1: NPS deductions can be done from the employee’s end and also from the employers end but an employee get tax exemption benefit both ways right? i.e; Employers: upto 10% Basic and Employees: upto 50k and both these exemptions can be availed together right? So 50k+10%basic or is the overall limit 50k only?

Q2: Health Checkup under 80D which has a limit of 5k can be availed for personal and parents or is it just personal checkup?

Hey @Shivam_Chawla,

Employer’s contribution towards NPS is exempted up to 10% of salary. On top of this, you can claim a deduction of ₹50,000 for additional contributions made by you.

Moreover, u/s 80D, you can claim ₹5,000 spent on preventive health check-ups for yourself or your parents.

Hope this helps.

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Hello, I have long term capital gain/loss from shares which were purchased before year 2018 and sold in year 2024 on which grandfather rules applies. I need to know that can we set off this gain/loss against LTCG from the shares which were purchased after 2018 and sold in 2024? As per grandfather rule LTCG before year 2018 were fully exempted but per new rule LTCG upto Rs. 1 lac only is exempted.

Hey @SunilJoshi,

Your LTCG on shares purchased before 2018 will be calculated by taking the cost of acquisition as the FMV on 31st Jan 2018. These LTCG can be set off against any long-term capital losses that you have in the current FY.

Hope this clarifies your query.

Can we use section 80D deduction on random medical expenses of our parents who are senior citizen?? Medical expenses like some medical tests, medicines etc.
If Yes, Do we need to have any proof for this while filling ITR??

Hey @Kush,

In case of senior citizens who don’t have health insurance, a deduction of up to ₹50,000 can be claimed on the medical expenses incurred for them.

Moreover, you don’t have to provide any proof while filing the ITR, however, you should have the relevant receipts in case of any scrutiny in future.

Hope this helps!

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A question on ELSS MF and tax deduction:
Can I invest in a tax saving MF and then withdraw the money after 1 year if I have not claimed any tax deduction against it?
Here is an example: I invest in a tax saving MF in Mar24 and file my ITR in Aug24.
Can I redeem the funds in the ELSS MF before Aug24, and not claim any deduction when filing ITR?

Hey @Yeti,

No, in the case of ELSS mutual funds, there is a mandatory lock-in of 3 years regardless of whether you have claimed a tax exemption on the same or not.

Hence, you would not be able to redeem the units before 3 years.

Understood. Thank you!

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