Save Tax Using These Easy-To-Follow Strategies

Save Tax Using These Easy-To-Follow Strategies

Paying taxes is almost inevitable and at the end of each financial year, every taxpayer frantically goes about making a range of investments without ever knowing about the various tax-saving measures. If you are among those individuals who are stuck in the rut every year and do not know how to use taxes to your advantage, here’s something for you.

All you need to do is follow these basic strategies and save on a major chunk of tax money. Let’s get started? Read on.

Using the Income- Tax Act to Your Benefit

According to Section 80C of the Income-tax Act, one can avail of a maximum tax benefit of INR 1, 00,000 per year by investing in certain avenues. So, what are these tax-saving instruments? Here a list:

●       Insurance premiums pertaining to life instruments

●       Public Provident Funds

●       Equity-linked Savings Scheme

●       National Savings Certificate

●       Fees paid to procure your children’s education, for a maximum of two kids

●       Fixed deposits in post office and banks

There are some ways to save taxes available from Section 80D and 80G too.

●       Under Section 80D you can claim a rebate of up to INR 35,000 for any health insurance premiums. For instance, if you have an insurance for you, your spouse, and children, a claim of INR 15,000 is available for you. At the same time, if you are paying health insurance premium for your parents over 65 years of age, you can claim a rebate on INR 20,000.

●       You can claim rebate on any donations made to any charitable organizations including welfare associations and the likes.

Paying any Rent? Get Tax Benefits, Then!

According to Section 80GG of the constitution, if you aren’t getting any House Rent Allowance (HRA) from your employer,  you can claim a deduction of least of the following :

●       INR 2000 per month.

●       25 percent of your total income or

●       Any excess of rent paid over 10% of your income.

However, you can’t claim any rebate if your spouse or minor children own any house in the place you reside or are accommodated in.

You can also claim deductions, albeit limited, if HRA forms a part of your salary. Here’s the exemption rule as follows.

●       The HRA you receive from your company.

●       About 50% of your salary depending on whether you live in a metro and 40% for a non-metro city.

●       The rent you pay minus 10% of your salary (includes basic expenditures).

Restructuring Your Monthly Payments

Almost all the major companies in the country offer a range of food and other related coupons as part of an employee’s remuneration package, which can act as a tax saver. In case, your company doesn’t allow such a thing, you can always use the official channels to instigate such a move.

Got a Home Loan? Tax Benefits Coming Your Way!

If you have a pending home loan, you can use it as an instrument to save up on paying some taxes. Under Section 80C of the Income Tax Act, the principality of the loan is included, and it can offer reductions up to INR 1, 50,000 to improve your coffers. Also, under Section 24, you can claim a separate deduction for INR 2, 00,000 on the interests you pay.

Apart from these, other minor tax-saving instruments include leave travel allowances and yearly bonuses.

There you have it. These are some of the most commonly known tax-saving strategies you can use to make the most out of the money you make. For more tax, property and financial advice, check out commonfloor.com, an extensive database of all things about Indian real estate.