Saving income tax is a common goal for many individuals. Here are ten tips that can help you legally minimize your tax liability:
1.Invest in Tax-saving Instruments:
Utilize Section 80C deductions by investing in instruments like Public Provident Fund (PPF), Employee Provident Fund (EPF), National Savings Certificate (NSC), tax-saving fixed deposits, and Equity-Linked Savings Schemes (ELSS).
2.National Pension System (NPS):
Invest in NPS to claim an additional deduction of up to Rs. 50,000 under Section 80CCD(1B).
3.Health Insurance Premium:
Purchase health insurance policies for yourself, your family, and your parents to avail deductions under Section 80D.
4.Home Loan Interest:
If you have a home loan, the interest paid on it is eligible for deduction under Section 24(b) of the Income Tax Act.
5.Education Loan Interest:
Interest paid on education loans for self, spouse, or children qualifies for deductions under Section 80E.
6.Donations to Charitable Organizations:
Donations made to eligible charitable institutions can be claimed as deductions under Section 80G.
7.House Rent Allowance (HRA):
If you are a salaried individual and live in a rented house, you can claim HRA exemptions as per specified rules.
8.Standard Deduction and Professional Tax:
Take advantage of the standard deduction available to salaried individuals. Also, consider the deduction for professional tax paid.
9.Tax-saving Bonds:
Invest in government-notified bonds like NHAI or REC bonds, which offer tax benefits under Section 80CCF.
10.File Returns on Time:
Filing your income tax return on time helps you avoid penalties and also ensures you can carry forward losses, if any.
Remember to consult with a tax advisor or look for Income Tax Return (ITR) filling services in Gurgaon to ensure that you are making the best decisions based on your individual financial situation. Tax laws can be complex and subject to change, so staying informed is crucial. It’s also important to prioritize sound financial planning and investment decisions rather than solely focusing on tax-saving strategies.
