Income Tax Rules: Like every year, this time also the last date for filing ITR is 31 July 2024. If you do not file ITR on time, you may have to pay a penalty. But before filing ITR, you should know how you can save income tax?
Income Tax Refund: The election season is over. The picture of who will form the government is also almost clear. The election trends are in favor of NDA and they have won 292 seats. But in the meantime, you must take care of Income Tax Return. Like last year, this time also the last date for filing ITR is 31st July. If you do not file ITR on time, then you may have to pay a penalty. But before filing ITR, you should know how you can save maximum income tax?
No tax on income up to Rs 2.50 lakh
Under the old regime of income tax, no tax is levied on income up to Rs 2 lakh 50 thousand. But here we will tell you how you can avoid income tax liability on income up to Rs 10 lakh. That is, you will not have to pay even a single rupee tax on income up to Rs 10 lakh. Let’s know how?
Things to keep in mind to reduce income tax liability-
1. If your annual income is also Rs 10.50 lakh, then how can you avoid paying income tax. Here we will tell you the complete math of this. On this income, first of all, you will get a discount of Rs 50 thousand under standard deduction. Due to this, your taxable income of Rs 10.50 lakh is reduced to Rs 10 lakh.
2. Now from the income of Rs 10 lakh, you can claim savings of up to Rs 1.50 lakh under Section 80C of the Income Tax Act. Under Section 80C, you can claim investments made in LIC, PPF, Sukanya Samriddhi children’s tuition fees, mutual funds (ELSS) and EPF. Under this, you can also claim the principal amount of home loan. In this way, your taxable income is reduced to Rs 8 lakh 50 thousand.
3. After this, you can claim Rs 2 lakh under Section 24B of the Income Tax Act. You get this exemption on the interest amount of home loan. After claiming these two lakh rupees, your taxable income comes down to Rs 6.50 lakh.
4. After this, you can claim medical health insurance up to Rs 25000 under Section 80D for tax saving. If your parents are senior citizens, then you can claim Rs 50000 for their health insurance. In this way, if you claim a premium of Rs 75000, then your taxable income comes down to Rs 5.75 lakh.
5. Now you can invest Rs 50000 in National Pension System (NPS) to reduce your tax liability. You can claim it under 80CCD (1B). That means now your taxable income has come down to Rs 5.25 lakh. You can reduce it even further.
6. After this, if you donate Rs 25000 to any institution or trust, then you will get the benefit under Section 80G of Income Tax and your taxable income will come down to Rs 5 lakh.
7. On income from Rs 2.50 lakh to Rs 5 lakh, tax of Rs 12500 is levied at the rate of 5 percent. But you are given exemption in this by the government. In this way your tax has come down to zero rupees.
Let us tell you that under the old tax regime, there is a provision of 5% tax on income of Rs 2.5 lakh to Rs 5 lakh. After this, there is a provision of 20% tax on annual income of Rs 5 to 10 lakh. Apart from this, there is a tax liability of 30% on annual income of Rs 10 lakh and above.
