Income Tax Savings: If your salary is more than Rs 10 lakh per annum, and you are going a large part of your earnings to the government in the form of tax. If you think that you have no way to save tax, therefore it is right to pay tax, then you are wrong. Even if your salary is Rs 10.5 lakh per annum, even then you will not have to pay even 1 rupee as tax.
For this, you have to keep the savings and expenses in such a way so that you can take full advantage of the tax exemption available on it. We are going to explain this method to you in very simple words. After which you can zero your tax liability. let’s understand with an example of Income Tax Savings-
Suppose your salary is Rs 10,50,000 per annum, and your age is less than 60 years, that means you will fall in 30% slab.
1- First you deduct Rs.50,0000 as the standard deduction
2- After this, you can save 1.5 lakh rupees under 80C. In this, you can avail of income tax exemption on investment in EPF, PPF, ELSS, NSC, and up to Rs 1.5 lakh annually as tuition fees for two children
10,000,000 – 1,50,000= Rs 8,50,000
3- If you invest up to Rs 50,000 annually in the National Pension System or NPS on your behalf, then under section 80CCD (1B) of the Income Tax Act, you get help in saving income tax separately.
4- If you have taken a home loan, then under section 24B of Income Tax, you can claim tax exemption on the interest of 2 lakhs.
5- One can claim a deduction of up to Rs 25,000 for health insurance premium including the cost of preventive healthcare check-up for a spouse, children, and yourself under Section 80D of Income Tax. Apart from this, if you buy health insurance for the parents, then you can get an additional deduction of up to Rs 50,000. The condition is that the parents should be senior citizens.
6- Under Section 80G of Income Tax, you can claim a tax deduction on the amount given in the form of donation or donation to organizations. Suppose you made a donation of Rs 25,000, then you can take a tax exemption on it. However, you will have to submit documents to confirm the donation. A stamped receipt should be received from the institution to which you donate. This will be the proof of donation that has to be submitted at the time of tax deduction.