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Five legal options to save your Tax
Posted on: 08/Feb/2018 3:09:20 PM
Planning the tax payments ahead will ensure many legal options to save lots of money through proper balancing of Gross Total Income (GTI).
Apart from the individual taxes like Income tax, Property tax and service tax, people who are engaged on owning a business has many forms of government’s collection of taxes. So saving money on perfect planning of the total income and the tax deduction are the heavily searched criteria in the current scenario of the nation.
Here are the five methods to save your money legally on the tax payments, totally relevant and subjected to the boundaries of legal tax guidelines of Indian Constitution.
1. Home Loans
Home loans are the best way to reduce your overall tax payments under the Section 80C. The individual who has opted a loan for his or her home buying or construction can claim a deduction for repayment of the principal amount which also includes the interest of the home loan under Section 24. The maximum deduction allowed under section 80C is Rs. 1,50,000 and under section 24 is Rs. 2,00,000.
2. Income Tax Acts of Section 80CCC, Save Tax U/s 80C, Section 80CCD
Investments on certain instruments allowed by the central government for the sole purpose of saving taxes under the Acts of Section 80CCC, Save Tax U/s 80C, Section 80CCD. The maximum deduction allowed as per these acts of the Income tax sections is Rs.1,50,000.
The most common instruments under these sections include Life Insurance Policy, Public Provident Fund Accounts, 5 years tax saving fixed deposits, National Savings Certificate (NSC) and Equity oriented Mutual Fund.
3. Medical/Health Insurances
This comes under the Section of Income tax U/s 80D that provides a shield for a person in any medical emergency situations. The insurance company bears the cost of the treatment including all types of medical services. Through this a person can save money for his or her whole family during the times of Health or Medical emergencies.
4. House Rents
Indian Citizen living on a rented house can save their taxes under the section of U/s 10(13A) of the Income Tax Act. Actual HRA received from the employer, Payment of rent in excess of 10% of basic salary are some of the basic option for the saving in deduction of the taxes.
5. Educational Loans
Under the Section of 80E of the Income tax, Education loans can be an option for an individual to save for his/her own education or for his/her family member’s education. On this platform there is no maximum limit for the deduction claiming of the taxes but repayment of Interest on Educational Loan is only allowed as deduction.
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