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Wednesday, September 28, 2022

How To Save Income Tax In Asses Income – Methods To Save Tax In Your Income

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Steps To Save Tax In Your Income – Ways To Save Income Tax In India | Tax Saving Schemes


Investment options under Sec 80C where you can save money in your taxes .
The most popular tax-saving options available to individuals and HUFs in India are under Section 80C of the Income Tax Act, Section 80C includes various investments and expenses you can claim deductions on – up to the limit of Rs. 1.5 lakh in a financial year.

Other Tax Saving options beyond Sec 80C

Apart from the 80C deductions, there are various deductions under Section 80 you can use to save on income tax. Tax benefits on health insurance premiums and home loan interest are a few-

  • Tax Saving insurance premium

    Medical insurance premium to be claimed at Rs. 50,000. (Rs 25000 for self spouse and children and Rs 25000 for dependent parents below 60 years). Claim medical insurance premium paid up to a maximum of Rs 1,00,000 per annum if availed for senior citizens. If senior citizens are not covered under any health insurance, then medical expenditure incurred can be claimed under 80D up to Rs 50,000
  • Tax Saving In Home Loan

    Interest paid on a home loan can be claimed as a deduction under section 24 up to Rs 2 lakhs. Section 80EE also allows you to claim a deduction of up to Rs 50,000 on home loan interest which is over and above the limit of section 24. Eligibility of additional interest of Rs 1.5 lakh on purchase of a new house under affordable housing scheme as per section 80EEA is extended till 31st March 2022
  • Tax Saving Schemes

    A home loan would also help you in reducing your taxable income as the principal portion of the home loan can be claimed under Section 80C up to Rs 1.5 lakh and the interest portion can be claimed as a deduction from income from house property

Tax Savings: Many saving schemes offer one or the other kind of tax benefits—may it be tax deductions, exemption, or both. Some schemes qualify for a tax deduction on investment of up to Rs.1.5 lakh under Section 80C of the Income Tax Act. Another set of schemes offer an exemption on the investment, interest accrued, and the maturity amount.

  • Public Provident Funds (PPF)

    PPF is a government-backed long-term tax-free savings scheme. The money deposited with your PPF account will get tax deduction under Section 80C of the Income Tax Act. The interest earned from such savings is also tax-exempt. You can open a PPF account at the nearest bank or post office. The money will be locked in for 15 years and can be extended in blocks of five years after the completion of the lock-in period. Returns will be calculated based on compound interest at the rate of 7.1% p.a. A minimum annual investment of Rs.500 can be made. You can invest up to Rs.1.5 lakh per annum.
  • National Savings Certificate (NSC)

    National Savings Certificate, another government-backed saving scheme, provides guaranteed returns along with a tax saving option. You can invest in an NSC at the nearest post office. The lock-in period for the scheme is five years. The government reviews the interest rate of the scheme once every quarter and takes a call on it.

However, the interest rate will not change during the tenure after you purchase the certificate. Tax deductions can be claimed on the investment up to Rs.1.5 lakh under Section 80C. Currently, the interest rate of 6.8% p.a. is applicable. The interest will be annually compounded and paid only on maturity. Upon maturity, the interest accrued is taxable and must be added to the total annual income. The interest reinvested and compounded is eligible for tax deduction under Section 80C.

  • Investments done in an ELSS scheme.
  • Tuition fees paid for two dependent children.
  • Life insurance premiums paid which should be up to 10% of the sum insured.
  • National Saving Certificates.
  • Repayment of principal component of home loan, etc.
  • PPF.
  • Sukanya Samriddhi Scheme.
  • 5-year Fixed Deposits.
  • Senior Citizen Saving Scheme.

Income Tax Saving Investment | How To File Income Tax Return | How To Save Income Tax In | What Are ELSS Funds


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