How to save income tax legally
5 ways to How to save income tax legally
1. Save Tax U/s 80C, Section 80CCC, Section 80CCD of the Income Tax Act
To encourage the habit of saving, and to direct the savings of taxpayers into lawful channels, the Central Government permits certain investment- linked deductions, provided the amount is invested in instruments as specified in Section 80C, Section 80CCC & Section 80CCD of the Income Tax Act.
Public Provident Fund Accounts
5 Year Tax Saving Fixed Deposit
Pension Plans Contribution to Employee Provident Fund
Life Insurance Policy
National Savings Certificate (NSC)
Equity Oriented Mutual Fund
Note that an individual can claim an additional deduction of Rs. 50,000 U/s 80CCD by investing in the National Pension Scheme (NPS).
2. How to save income tax legally By Reduce Income tax via Home Loan
How to save income tax legally, if an individual has taken a Home Loan, then he/she is entitled to claim the deduction for repayment of the principal amount (Deduction of the Principal amount under section 80C), as well as the interest of the home loan (Deduction of the Interest amount under section 24). The maximum deduction allowed under section 80C is Rs. 1,50,000 and under section 24 is Rs. 2,00,000
3.How to save income tax legally
By Reduce Income tax via Home Loan Save Income Tax U/s 80D of the Income Tax Act
Medical/health insurance works as a shield and protects a person and his family from any financial crisis during a medical emergency. It’s the insurance company which bears the cost of treatment, and ensures that the policy holders can avail the best medical assistance. Based on the nature and type of medical insurance policy, in addition to hospitalization charges, the policy may also cover ambulance charges, domiciliary expense, pre and post hospitalization expenses, etc.
The Income Tax Act permits an individual to save tax through deductions if the taxpayer has paid a premium for insuring his/her own health or the health of his/her family members (parents, dependent children or spouse).
4.How to save income tax legally
By Reduce Income tax via Home Loan Tax Saving with House Rent paid
If the individual is staying in a rented house and is receiving House Rent Allowance (HRA) from his employer, he/ she can claim deduction U/s 10(13A) of the Income Tax Act. The least of the following will be considered as deduction from the individual’s salary:
Actual HRA received from the employer
Payment of actual rent in excess of 10% of basic salary
50% of the basic salary (if the individual is staying in a metro city) or 40% of the basic salary (if the individual is staying in a non-metro city).
However, if the individual is a non-salaried person and does not receive HRA, or does not own a residential property, he/ she can still get the deduction of house rent paid during the year from his/ her taxable income U/s 80GG of the Income Tax Act.Under section 80E of the Income Tax Act, an individual can claim tax deduction on an education loan (for higher studies),if the loan is for himself/ herself, his/ her children, spouse or even for a student of whom he/she is the legal guardian.
How to save income tax legally
5 ways to How to save income tax legally
1. Save Tax U/s 80C, Section 80CCC, Section 80CCD of the Income Tax Act
To encourage the habit of saving, and to direct the savings of taxpayers into lawful channels, the Central Government permits certain investment- linked deductions, provided the amount is invested in instruments as specified in Section 80C, Section 80CCC & Section 80CCD of the Income Tax Act.
Public Provident Fund Accounts
5 Year Tax Saving Fixed Deposit
Pension Plans Contribution to Employee Provident Fund
Life Insurance Policy
National Savings Certificate (NSC)
Equity Oriented Mutual Fund
Note that an individual can claim an additional deduction of Rs. 50,000 U/s 80CCD by investing in the National Pension Scheme (NPS).
2. How to save income tax legally By Reduce Income tax via Home Loan
How to save income tax legally, if an individual has taken a Home Loan, then he/she is entitled to claim the deduction for repayment of the principal amount (Deduction of the Principal amount under section 80C), as well as the interest of the home loan (Deduction of the Interest amount under section 24). The maximum deduction allowed under section 80C is Rs. 1,50,000 and under section 24 is Rs. 2,00,000
3.How to save income tax legally
By Reduce Income tax via Home Loan Save Income Tax U/s 80D of the Income Tax Act
Medical/health insurance works as a shield and protects a person and his family from any financial crisis during a medical emergency. It’s the insurance company which bears the cost of treatment, and ensures that the policy holders can avail the best medical assistance. Based on the nature and type of medical insurance policy, in addition to hospitalization charges, the policy may also cover ambulance charges, domiciliary expense, pre and post hospitalization expenses, etc.
The Income Tax Act permits an individual to save tax through deductions if the taxpayer has paid a premium for insuring his/her own health or the health of his/her family members (parents, dependent children or spouse).
4.How to save income tax legally
By Reduce Income tax via Home Loan Tax Saving with House Rent paid
If the individual is staying in a rented house and is receiving House Rent Allowance (HRA) from his employer, he/ she can claim deduction U/s 10(13A) of the Income Tax Act. The least of the following will be considered as deduction from the individual’s salary:
Actual HRA received from the employer
Payment of actual rent in excess of 10% of basic salary
50% of the basic salary (if the individual is staying in a metro city) or 40% of the basic salary (if the individual is staying in a non-metro city).
However, if the individual is a non-salaried person and does not receive HRA, or does not own a residential property, he/ she can still get the deduction of house rent paid during the year from his/ her taxable income U/s 80GG of the Income Tax Act.Under section 80E of the Income Tax Act, an individual can claim tax deduction on an education loan (for higher studies),if the loan is for himself/ herself, his/ her children, spouse or even for a student of whom he/she is the legal guardian.
How to save income tax legally
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