How to Save Indian Income Tax?

How to Save Indian Income Tax?

How to Save Tax Money? Because of taxes, everyone who gets a salary asks this question. We know that there are different levels of income tax. People are worried about having to pay a high-income tax because of how much they make.

There are many legal ways to get around having to pay income tax. Some people don’t care about paying income tax, but they do it anyway. But there are other people who do a great job of planning their taxes. This post is about how to save money on income tax in India.

A slab of Income Tax

According to the new changes made by the Finance Ministry, there are now two levels of income tax. With the old tax rate, taxpayers will be able to save tax money by investing in investments that help save tax money. The new tax rate is easy to understand.

Taxpayers don’t have to invest anything, and they can get a lower tax rate without doing so. The new tax rate will be better for people in the upper middle class who don’t invest to save tax. Here is the tax rate for the fiscal year (FY) 2021–2022.

Read: Not the Monster You Might Think Is Under the Bed

How to save on India’s income tax

There are many legal ways to lower your tax burden. Here are some of the most common ways to pay less tax. This includes things like investments, loans, insurance, etc.

Section 80C: If you use your section 80 C limit

you can save up to 1.5 Lakh under section 80C. Investing in different tax-saving instruments under section 80C can save you up to 1.5 lacks in tax. Here are the details of tax-saving plans that can help you save money on taxes.

  • ELSS, or Equity-Linked Savings Scheme, is a type of mutual fund that is often called an equity-linked savings scheme. You can invest in ELSS either all at once or in small amounts over time. The money in ELSS funds is locked up for three years. The ELSS has a 10% long-term capital gain that can be used.
  • Fixed Deposit to Save Tax: This is one of the best ways to save money on taxes. For investors who don’t want to take risks, FD is a good choice. Also, you won’t be able to change this instrument for 5 years.
  • Public Provident Fund (PPF): The PPF is thought to be one of the safest ways to invest your money. PPF is a way to invest for the long term. The main good thing about PPF is that it is an EEE. By putting money into PPF, you can save up to 1.5 Lakh per year.
  • Life Insurance Premiums: Under section 80C, you can deduct the cost of life insurance premiums for yourself and your family. This is true for all kinds of insurance policies, including term plans, ULIPs, endowment policies, and so on.
  • Home Loan: Under section 80C, you can get a tax break if you pay off the principal of your home loan. The most that can be spent on capital each year is 1.5 lakh.
  • Tuition Fees: Under section 80C, parents can get a tax break for the school tuition fees they pay for their children.
  • Sukanya Samriddhi Scheme: You can put money into the Sukanya Samriddhi scheme and get a tax break for the amount you put into it.
  • Senior Citizen Saving Scheme: The Senior Citizen Saving Scheme Fixed Deposit is a special plan for senior citizens. On SCSC, the interest rate for people over 65 is higher. By putting money into SCSS, a person can get a tax break.
  • Employees Provident Fund – (EPF ) Section 80C says that you don’t have to pay taxes on any money you put into the employee provident fund.

Section 80CCD of the National Pension System (NPS)

Under section 80CCD, if you put money into the NPS, you can get an extra tax break of 500,000. You’ll need to set up an NPS account and invest. The payment will have to stay in the NPS account until the person turns 60.

Section 80D: Health Insurance Premium

Up to 25,000 in health insurance premiums paid for yourself and your family are exempt from tax. The most a senior citizen can get is 50000. The most you can spend on yourself and your senior citizen parents is 75,000.

Interest on a home loan is paid back.

The interest paid on a home loan can be written off on your taxes. The most you can deduct from your taxes for paying off a home loan is 2 Lakh. This amount is on top of the 1.5 Lakh amount that can be claimed under section 80C.

Earnings on a savings account

Taxes don’t have to be paid on savings account interest income up to 10,000 per tax year. This is what the 80TTA says. Under section 80TTB, the limit on how much tax you don’t have to pay as a senior citizen is 50000.

Section 80G donations

Section 80G says that you can get a tax break if you give money to charity. We can give the money to any group that gives a receipt under Section 80G. This includes political, religious, and charitable groups.

Section 80E is about paying back a student loan.

The tax exemption can be used to pay for the interest on the student loan. There will be no cap on how much interest can be paid on student loans.

One Last Thing

How to Save Tax Money? the thing that Indians always look up to the most. People want to save their tax money and pay less tax by doing legal things that the government lets them do. Some people use these methods, while others don’t.

These days, many people plan their taxes well to pay less in taxes. In this post, we talked about real, legal ways to save on India’s income tax. The government of India has given its permission for these methods to be used.

Join our social handles | EKANA TECHNOLOGIES

Leave a Comment

Ekana Technologies PTE Ltd

160 Robinson Road, #14-04 Singapore Business Federation Centre, Singapore (068914)

© 2023 Ekana Technologies PTE Ltd • All rights reserved