The all time favorite question to ask is – How to save Income tax? Every year, there are some or other code change and its important to stay updated on the various ways in which tax can be saved. Here are some ways.
Easiest way to save income tax – Section 80C
One of the easiest ways to save on taxes is by taking advantage of deductions under Section 80C. Here are the key points to keep in mind:
- Tax Deduction Limit: You can reduce your taxable income by up to Rs. 1.5 lakh via section 80C deductions.
- Who Can Benefit: These deductions are available to both individuals and Hindu Undivided Families (HUFs).
- Plan and save: Utilizing section 80C is a simple and effective strategy to save money on your taxes annually.
Its important to explore all the eligible investments and expenses under Section 80C to maximize your tax savings.
Eligible Investments and Expenses: Here are some common options you can consider for Section 80C deductions:
Employees’ Provident Fund (EPF)
Public Provident Fund (PPF)
Fixed Deposits with a tenure of 5 years or more
Life Insurance Policies
ELSS Mutual Funds (Equity-Linked Savings Scheme)
National Pension Scheme (NPS) and other pension plans
Save income tax by optimising salary structure
For salaried individuals, consider the following deductions that are available:
- House Rent Allowance (HRA) if you are renting
- Reimbursement for telephone/internet expenses
- Education allowances
- Food coupons or meal vouchers
Include Medical Insurance
You are allowed to claim deductions for health insurance premiums paid for yourself, your spouse, dependent children, and dependent parents.
Home Loan – the big one
You are allowed a deduction of 1.5 Lakh on home loan repayment. Its a great way to own an asset and take tax benefit as well.
Be a good citizen, and pay your taxed correctly and on time.