New Delhi: Only a few months are left for the end of FY 2023-24, i.e. the financial year 2023-24, and you have to pay income tax on the income earned during this financial year. You will file the account of tax paid, i.e. ITR (Income Tax Return) only by July, 2024, but the income tax will have to be paid before March 31, 2024, otherwise interest and penalty will have to be paid later, i.e. at the time of ITR filing. .. In many similar news, we have told many times before which items or schemes can be invested in to save income tax, but today we are telling you such top 10 tricks, with the help of which A lot of income tax can be saved…
TOP 10 TIPS TO SAVE INCOME TAX
Save under Section 80C of the Income Tax Act: Your provident fund deducted from the salary under Section 80C of the Income Tax Act, amount deposited in pension fund under 80CCC, premium deposited for life insurance policy, NSC, i.e. Investment in National Savings Certificate, Accrued interest of old NSC, Investment in PPF, i.e. Public Provident Fund or Public Provident Fund, Unit Linked Insurance Plan (ULIP), Children’s tuition fees, Fixed deposits for more than 5 years. A total exemption of Rs 1,50,000 is given on investments made in schemes like Equity Linked Savings Scheme, Principal Repaid on Home Loan, Sukanya Samriddhi Yojana etc. That means, up to Rs 1,50,000 of the amount invested in these schemes is deducted from your taxable income.
Open NPS Account: Apart from the exemption under Section 80C, you can get a rebate of Rs 50,000 (Section 80CCD1B of the Income Tax Act) on investments made in the National Pension Scheme, i.e. NPS, so, if you have sufficient amount, So definitely invest in this scheme. With this, not only will you be able to save income tax on the investments made every year, but you will also get the pleasure of pension after retirement.
Keep in mind Section 80TTA: Many people are not aware that the interest earned on the money deposited in the savings accounts of banks is also taxable, and income tax has to be paid on that too. But under Section 80TTA of the Income Tax Act, you get income tax exemption on interest up to Rs 10,000 received on the amount deposited in your savings account. In simple words, whatever interest you get from your savings account (or all savings accounts), you can get tax exemption on the amount of Rs 10,000, that is, you can deduct it from your taxable income. By the way, the thing to remember here is that the interest received on fixed deposit or recurring deposit is not tax free.
Interest paid on home loan or rebate on House Rent Allowance (HRA): Many employed people buy a home and take a home loan, the EMI of which has to be paid continuously. Out of the interest amount paid to the bank in that EMI, tax exemption can be availed on the amount up to Rs 2,00,000 annually. That means, out of the interest you are paying in your total EMI, an amount of Rs 2,00,000 is tax free. Apart from this, those who have not been able to buy a house at present, and live in a rented house, can also get exemption in income tax by giving the house rent receipt, the method of calculating which you can read here –
Exemption on health insurance premium: If you are below 60 years of age, and are paying the premium for a health insurance policy for yourself, your spouse or for dependent children, then you will get income tax exemption on an amount up to Rs 25,000. You can get this, but at the same time, if your parents are above 60 years of age, and you are paying premium for them too, then you can get an additional rebate of up to Rs 50,000. Under the same section of the Income Tax Act, if your age is more than 60 years, then you can also avail exemption on premium up to Rs 50,000 instead of Rs 25,000.
Exemption is also available on 80DD: God forbid, if any of your dependents are disabled, but if so, you can get income tax exemption on the expenses incurred on them. In these cases, if the disability is 40 to 80 percent, then exemption up to Rs 75,000 can be availed, and if the disability is more than 80 percent, then the amount of expenditure incurred on it can be availed of up to Rs 1,25,000. Discounts may be available.
Income tax exemption is also available on 80DDB: Under Section 80DDB of the Income Tax Act, tax exemption is given on the amount spent on the treatment of a particular disease of a dependent. These diseases include diseases like dementia, aphasia, Parkinson’s, cancer, AIDS, renal failure, hemophilia and thalassemia. Those counted as dependents may include spouse, children, parents or siblings. Under this section, if the patient’s dependent is below 60 years of age, then exemption up to Rs. 40,000 can be taken, and if the patient’s dependent is above 60 years of age, then the expenditure up to Rs. 1,00,000 can be included in the taxable income. can be subtracted from.
Exemption will also be available on education loan interest (80E): Under Section 80E of the Income Tax Act, education loan (higher studies) taken for yourself, for your spouse, for children or for those children of whom you are the legal guardian. For this reason, the interest paid is deducted from the taxable income. Under this section, the entire amount of interest paid is considered tax free, and there is no maximum limit, but remember, the interest amount is tax free only for a maximum of 8 years, and If you repay the loan for more than 8 years, you will not get tax exemption on the interest paid after 8 years. And yes, even if the loan is repaid in less than 8 years, no rebate will be given under this head in subsequent years.
Choose the right tax regime for yourself: Now for the last three-four years, there are two systems to calculate and pay income tax, which are called Old Tax Regime and New Tax Regime. . All these exemptions are given in the old tax system, but the tax slabs, i.e. income tax rates, are slightly higher. Most of the exemptions are not given in the new tax system, but the tax rates are quite low. So, calculate very carefully and decide – what is your savings, how much total exemption can you get, and which one will benefit you more – getting the exemption and staying in the old system or not taking the exemption and paying tax under the new system. will be. You can read about this in detail here
Will file ITR on time: After paying tax on the income earned in every financial year, you have to share your accounts with the Income Tax Department, which is called filing Income Tax Return (ITR). For the financial year ending on March 31, ITR has to be filed by July 31 of the same year, but sometimes this date is also extended. But remember, if any tax liability of yours arises at that time, and you had not deposited that amount of tax before March 31, then you have to pay interest on that amount and also some penalty. Additionally, there is a huge penalty charged for filing ITR after the due date, which will definitely put you in trouble, so it is always better to do the math before March 31 and estimate your tax liability. How much is it, and also deposit the self assessment tax on it before 31st March, so that interest and penalty can be avoided, and yes, also submit the income tax return on time, i.e. before 31st July, so that the penalty is not charged. Money can be saved.
