Every year anyhow it is mandatory for everyone to pay the taxes. But planning your tax in a very proper manner can save so much of the income tax of the individuals. As everyone wants to averse from paying the taxes. Basically all love to be in a tax-free world. But it is not possible to live such, but you can plan your taxes in such a way that you can save some income tax.
How to save Income Tax?
As these taxes are the financial burden for every employee, this can be planned properly for saving the tax. Because of the lack of knowledge also some may start paying the very high taxes to the government. Some examples for saving income tax are PPF, fixed deposits, National Saving Certificate(NSC), Life Insurance Premiums, Tuition Fees Paments, Sr.Citizen Savings Scheme, EPF, Home Loan Repayment, National Pension System, Deduction on the rent, etc. To get awareness about how to save these taxes, you can follow the below details.
The tax saving guide is as follows-
- Section 80C
- Section 80D
- Under Section 80CCD
- Section 80E
- Section 80EE
- Under Section 80 G
- Section 80GG
- Section 80TTA
- Under Section 80DD
- Section 80DDB
- Section 80U
- Under Section 80GGC
Under the Income Tax Act 1961, as per section 80C taxpayers can claim the deductions. These deductions can be on any benefits such as contributions, investments, or any payments towards the schemes or the financial products as per the Income-tax Law. Below are the schemes which can be followed for saving the taxes.
- Equity Linked Savings Scheme
- Senior Citizens Savings Scheme
- National Pension Scheme
- Term Life Insurance Premium
- Public Provident Fund
- Nationals Savings Certificates
- Tax-Saving FDs
- Home Loan Repayment
- Tuition Fees
Under this section 80CCD, it tells us about the investments in the NPS which is National Pension System for tax deductions in the taxpayers. In this section, there are two subsections-
- Section80CCD (1b)
- Section 80CCD (1)
Under Section 80CCD (1)-
In this section, tax deductions can be done by investing in the NPS. The individuals who are having their age between 18-60 years can benefit from this tax deduction by investing in NPS. This benefit can be applicable even for the NRIs. 10% of your salary can be availed for deduction under this section. 20% is for self-employed individuals from their total income.
Section 80CCD (1b) –
In this section, if you invest in the NPS, there is a deduction of the Rs.50,000. When you invest in the NPS each year you can get a tax deduction of Rs.2 lakhs.
Up to 1 lakh deductions can be claimed under this section 80D of the income tax act this contributions can be claimed towards parents, spouse and children and can be claimed for the self and medical insurance also. (HUF) Hindu Undivided Families and individuals can use this benefit
Under Section 80E
If you availed an education loan and you are repaying the loan amount then you can claim this section 80E in the income tax act to deduct some amount for your total income.
If any individual has taken a home loan for the first time can claim for this section 80EE of the income tax act to get a tax deduction benefits on the interest of the home loan
If any individual is making a donation can use these benefits of tax deductions on the charities you have done in the organization these benefits falls under section 80G of the income tax act.
Under Section 80GG
If you have a house rent allowances (HRA) and you are salaried employed then you can claim towards deduction on it under this act. If any individuals salary not having this component on HRA but you pay for the living purposes even in any furnished or unfurnished place can claim this section on rent.
If you have any interest income, then you can claim deduction can be up to Rs.10,000/- under this act. This deduction can be done on the following
- The interest of the post office of savings on a bank account
- Interest earned on a savings bank account
- The interest earned on a savings bank account with a co-operative society engaged in banking activities
If you are taking care of any disable person or if you are taking care of your family and if you have any disability you can enjoy the tax benefits, under this income tax section
Under Section 80DDB
The tax deduction under the section can be claimed for the treatment of the listed diseases. This can be claimed only by the taxpayers. Even this benefit can be utilized for the sibling parent or spouse of the taxpayer.
According to the government the individuals who certified with at least 40% of the disability with the relevant medical can claim for this benefit. This can be claimed by the followings-
- Mental illness
- Locomotor disability
- Low vision
- Hearing impairment
- Mental retardation
Under this section, the individuals who contributed to the political parties can get deductions. But those political parties should be registered under section 29A of the representation of the people.