The income tax department gives you many different options to save tax! But, do you know how to save maximum income tax?
If your income exceeds a basic exemption limit, you are liable to file an income tax return for the financial year regardless of the tax liability. But, you have various options to reduce your income tax liability, which are detailed below:
1. Save tax by investing for your future
Invest in Mutual funds, infrastructure bonds, Life Insurance and more. Claim tax benefits of up to INR 60000.
Section 80C of the Income Tax allows deduction from taxable income in respect of investments of up to 1.5 lakhs under several schemes proposed by the Government. Section 80CCD(2) allows for an additional deduction of INR 50000 when your employer is contributing to National Pension Scheme.
2. Save Tax by traveling with your family!
Travel with your family within India. Travel by road, rail or air. Claim income tax benefits of up to 32% of the travel cost!
Leave Travel Allowance or LTA is type of allowance provided by the employer for the employee to cover his travel expenses during leave. LTA is eligible for income tax exemption as per the Income Tax Act 1961 under Section 10(5).
3. Save Income Tax with your House Rent
Stay in a premium accommodation with your family. Claim income tax benefits of up to 30% on your House Rent!
4. Save Tax by taking care of your Family!
Purchase a premium medical insurance to secure your family. Claim income tax benefits of up to INR 30,000!
Section 80D of the Income Tax allows deduction from taxable income in respect of medical insurance premium or medical expenses paid for your family.
5. Save Tax by taking care of your Parents!
Purchase a premium medical insurance to secure your parents. Claim income tax benefits of up to INR 30,000!
Section 80D of the Income Tax allows deduction from taxable income in respect of medical insurance premium or medical expenses paid for your parents.
6. Save income tax with Education Loan
Get income tax deduction on loan taken for higher education. Claim income tax benefits of up to 30% on the loan interest!
7. Save income tax by purchasing an affordable home
Purchase an affordable home which costs less than 45 lakhs. Claim tax benefits of up to 1.5 lakhs.
Purchase of an affordable home enables you to claim income tax deduction under Section 80C, Section 24 and Section 80EEA.
8. Save income tax with Home Loan
Avail a home loan for purchase or construction of your home. Claim tax benefits of up to 1.05 lakhs.
Home loan is the option that helps you save maximum income tax. Home loan EMI has two components: a) Principle Repayment and b) Interest Payment. You can save up to INR 1.5 lakhs with Principle Repayment under Section 80C. You can also save INR 2 lakhs with Interest Payment under Section 24.
9. Save tax by purchasing an electric vehicle
Help the environment by purchasing a new electric vehicle. Claim income tax benefits of up to INR 30,000!
Section 80EEB of the Income Tax allows deduction from taxable income in respect of interest on loan taken for purchase of electric vehicles.
10. Save Income Tax by giving to Charity!
Contribute to Relief Funds, NGOs and other charities. Claim income tax benefits of up to 30% on the contribution.
Section 80G of the Income Tax allows deduction from taxable income in respect of donations paid to approved funds and charities.
11. Save income tax with school and hostel fees
Claim tax deduction for your children’s school and hostel fees. Claim tax benefits of up to INR 46800.
Section 10(14) of the Income Tax allows exemption from taxable income in respect of Children education allowance and Hostel Allowance. Also, Section 80C allows deduction from taxable income in respect of Tuition Fees for children.
To save maximum tax use all the possible options explained above. The Government of India is encouraging you to make savings and investments by giving you various options to save tax.
Lenvica’s Income Tax Calculator enables you to key in data from your pay slip to calculate Income Tax accurately. The income tax calculator allows you to experiment on investment opportunities to arrive at an optimum investment plan to save maximum tax.
Visit our free online income tax calculator www.lenvica.com/income-tax-calculator
Lenvica’s Income Tax Calculator enables you to key in data from your pay slip to calculate Income Tax accurately.