Remember the feeling you have when you receive your salary and then you realize a chunk of it has been cut as tax and then you proceed to create other sources of income which at the end of the year you are rudely informed will be taxed too. We all know that our taxes go towards the development of the nation and it is our patriotic duty to pay our taxes and watch our nation grow. But don’t you sometimes have a nagging feeling that it would be nicer if you could just pay a little less of your salary as income tax. What we mean is that you earn a fixed salary every month and wouldn’t it be nicer if you could save a larger part of it. While saying this at no point do we recommend for you to evade taxes or not disclose income as that would land you a significantly large stay with the Indian Prison Board. So, the following are a few ways the government allows you to save on your taxes in a manner it does frown upon.
Section 80C of the income tax act
This section is the most commonly used and recommended by tax consultants. It is a relatively straightforward thing to do where you are allowed to invest up to ₹1,50,000 which will then be deducted from your total taxable income
Section 80 CCD
This section is for those who have a pension account of sorts and it allows up to 10% of the individuals salary or ₹1,50,000 whichever is less.
Section 80 TTA
A not commonly utilized section, it allows you to deduct up to ₹10,000 against your interest which you will earn from a savings bank account.
Section 80D
An amount of up to ₹25,000 can be deducted under this section as payment towards the payment of premium for medical insurance.
Section 80 G
One for the philanthropists out there. This section rewards you for contributing you to a social cause. Various slabs of deductions are available based on the cause you donate towards. It ranges from a total 100% to a more modest 10%.
Home loan
Firstly, congratulations on the purchase of your new home and now lets make that home loan work for you. Under section 24 of the income tax act you can claim benefits towards interest on the interest payment of the loan.
Allowances
Your salary is also something which can be utilized to cut down on your total taxable income. Sounds counterintuitive right? It is not so. Allowances like your House Rent Allowance (HRA), conveyance/travel allowance and your telephone bill reimbursement are some things which can be adjusted against your salary and will then allow you to reduce your total taxable income.
So go ahead and use these smart techniques to save some of that hard earned money as we are sure that you wouldn’t want to let go of an opportunity like this.
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