All You Need to Know About Saving Income Tax
Recommended ways to save taxes under Sec 80C & 80D
- Make an investment of Rs 1.5 Lakh under Sec 80C to reduce your taxable income
- Buy medical insurance and claim a discount up to Rs. 25,000 (50,000 rupees for seniors) for medical insurance premiums under Section 80D
- Claim a discount of up to Rs 50,000 on interest on a housing loan under Section 80EE
Investment options under Sec 80C
The most tax-saving options available to individuals and HUFs in India are under Section 80C of the Income Tax Act. Section 80C includes many investments and expenses that can be used to claim discounts. The maximum section of 80 ° C is 1.50 in the fiscal year, which means that you can use this amount in full to reduce taxable income.
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Other options for saving taxes outside Sec 80C
Apart from the discounts available under Section 80C, there are many other deductions under Section 80 which can also be claimed to provide income tax. These deductions include health insurance premiums and tax benefits on mortgages
- Buy medical insurance and claim a discount up to Rs. 25000 (50,000 rupees for seniors) for medical insurance premium
- Claim a discount of up to Rs 50,000 on interest on a housing loan under Section 80EE
- A home loan also helps you reduce your taxable income. The main part of the home loan can be claimed under Section 80C up to Rs. 1.5 crore. The interest portion can be claimed as a deduction from the homeowner’s income
How to plan your investments to provide taxes for the year
The best time to start planning your investments to provide tax is at the beginning of the fiscal year. Most taxpayers stall until the last quarter of the year and end up making quick decisions. Instead, if you plan at the beginning of the year, you can make investments that can also help you achieve your long-term goals. Tax-saving investments should be used to build wealth as well, not only to provide taxes.
Use the following indicators to plan your tax savings for the year:
- Check the tax savings you are already making and can claim. This includes expenses, such as premium, tuition fees for children, Contribution of EPF, repayment of housing loans, etc.
- This amount is deducted from $ 1.5 lakh to find out the amount of investment. There is no need to invest the full amount if the expenses are covered.
- Choose your tax savings investments based on your goals and profile. ELSS, PPF, NPS, and fixed deposits are among the common options.
That way, you can figure out how much you need to invest to save taxes. It is best to start investing in the first quarter of the financial year so that you can distribute investments throughout the year. This will not affect you at the end of the year, and will also allow you to make informed investment decisions.
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