Do you have a good job and a good salary… as well as belonging to India. But are you aware of the tax-saving options accessible to you…? By clicking on our blog, you have made the ideal decision.

Let us first grasp – before we dive into the ocean of brilliance that is income tax saving policy.

What is income tax, and why is it required of us to pay it to the government?

On a more lighthearted note, you should be aware that income tax is a direct tax that must be paid by everyone on the income produced during the previous year. In tax terms, the tax is due in the assessment year after the prior year. The government, as we all know, does not work and has no sources of income. Have you ever considered how they spend all of their money on expensive projects such as building roads, and dams, working on other policies, and so on? The simple answer to this issue is that they are using the money we pay them in taxes as a source of income.

Why would you want to save money on taxes?

Saving tax is unquestionably vital, as what good is it if we earn and then pay the government the entire amount or an excess? It doesn’t sound good, and it isn’t the best solution for this situation.

If you are eligible for any government scheme or if you are a senior or super senior citizen, you have the right to save tax in accordance with the government’s guidelines, and you should take advantage of it. It is beneficial to your health while also ensuring that you do not violate any government regulations.

But suppose if someone wants to take unnecessary benefits even though they are not eligible then it is to be proven wrong by our government policies as they don’t allow us to do so and it is not ethical either. Let’s assume you have done so right now and nobody knows about but what? when they got to know, Do you know what happened to you..? You are called to be a defaulter and have to pay tax with a penalty imposed upon you so it is better to be disciplined in terms of paying tax. 

The best way to assess taxes is to use a formula.

Appropriate tax evaluation must be completed by anyone, either by themselves or with the assistance of a Chartered Accountant, who is the only person known for their particular understanding of tax matters.

Let’s not lose any more time and figure out how to save money on income taxes, especially in India

1. National Pension System 

The National Pension System (NPS) is a government-run pension system (NPS). It falls under section 80C and includes a variety of different alternatives such as a Sukanya Samriddhi Account, life insurance, and public provident fund, among others.

2. Amount inherited via will 

There is no inheritance tax in India, hence anyone inheriting property from their parents or relatives through WILL is not liable for taxes.

3. The HUF Account

If you are a member of a HUF or a joint Hindu family, you can take advantage of Section 80C to save tax on your second income or any additional income.

4. Agriculture Revenue 

 In India, any income obtained from agricultural land is not taxable; this includes any land rent, agricultural product income, and farm building essential for agricultural productivity.

The farm income exemption covers this under Section 10(1).

5. Program for Voluntary Retirement

The money given to them is not taxable up to five lakh under Section 10(10C) of the tax exemption. It is only applicable to those employees who are retiring willingly. 

6. Wedding presents

If any money given to you during your marriage is tax-free under Section 56(2) of the tax code.

7.  Equity mutual funds

It’s a hard one since it’s linked to the stock market, which is constantly fluctuating. Pro-tip: file your tax return on time so you can be compensated if you incur any losses.

8. Pursue higher education 

They can take advantage of scholarships for studies that are tax-free and covered under income tax section 10(16) to save money.

9. Interest income earned on NRE 

Interest income earned on NRE (Non-Resident External Account) accounts is not taxable since our government encourages NRIs (Non-Resident Indians) to invest.

10. Interest from savings accounts

This section TTB is for elderly citizens and TTA is for persons under 60 years of age, and you can save in a post office account or a cooperative society to get a tax exemption.

11. Medical Assistance 

 Medical treatment for a designated disease for yourself or a relative qualifies you for a tax deduction under section 80DDB of the Internal Revenue Code.

12. Expenses for medical treatment 

If you have paid any medical expenses for a disabled person, you may be eligible for a tax deduction under section 80U.

13. Medical treatment for handicapped people 

 If you have incurred expenses for handicapped dependent relations under section 80DD, you can claim a deduction of $125,000

14. Medical Insurance

Medical Insurance is a type of insurance that covers a person’s medical expenses.Do you have a regular medical insurance premium? Do you know that under Section 80D of the Income Tax Act, you may be able to save money on your taxes?

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15. Educational Loan 

Because India is a developing country, Indians are permitted to take out loans for education, which are exempt from taxation under section 80E.

16. Long-term capital gain

On the sale of a residence, the long-term capital gain (LTCG) is calculated. If you have sold a property and received any gain, that sum is deemed LTCG and is not taxed under section 54 of the Income Tax Act.

17. Income Tax Act 

 Only if you meet the conditions set forth in sections 24 and 80EEA of the Income Tax Act can you make use of this benefit.

18. Assured Fund

You can avoid tax if you get money from a provident fund after 5 years.

19. National Pension Scheme

If contributions to the NPS are made, there is an additional benefit in terms of tax savings (National Pension Scheme) If you have done so, you can claim a tax deduction under section 80CCD (1B).

20. Donations to charitable or non-profit organizations 

Donations to charitable or non-profit organizations can also help you save money on taxes under Section 80G of the Act.

21. Financial contributions to political parties

If you have made any non-cash donations to political parties, you may be eligible for exemptions under section 80GGC.

22. Inflation-adjusted interest on electric vehicle purchases

Because electric vehicles do not use fuel and thus indirectly benefit the environment, our government has set aside a maximum of Rs. 1,50,000 to be exempted if you acquire an EV under Section 80 EEB.

23. Profits in partnership enterprises

 As a partner in any firm, you can benefit from tax savings because your firm has already paid tax on profits earned from operating partnership firms.

24. Business travel or accommodation expenses

Hotel and travel expenses connected to business will be reported as business expenses by business people. As a result, the sum is not taxed.

25. Price of food
This can also be claimed as a business cost.

You should pay tax because the government is ultimately working for us and we should be responsible for it, but if you are qualified for any exemptions, you should take advantage of them.