In India, citizens are given income tax exemption under the sections of the Income Tax Act 1961. All taxpayers are required to file ITR return once a year. If your income comes under the ambit of income tax, then you must pay tax. The government gives an opportunity to taxpayers who file ITR to save Rs 1.5 lakh annually in tax.
Save Income Tax: However, not all taxpayers are aware of how to save tax. Today we are going to tell you 6 such ways, with the help of which you can save tax up to Rs 7 lakh. You will have to pay zero tax on earnings up to Rs 12 lakh. Let us tell you that in the old tax regime, the government has already made income up to Rs 5 lakh tax free.
Know those 6 ways-
1. If your salary is Rs 12 lakh, you can structure it in such a way that your HRA will be Rs 3.60 lakh, your LTA will be Rs 10,000, and phone bills will be Rs 6,000. You will get a standard deduction of Rs 50,000 on salary under Section 16. You can claim exemption on profession tax of Rs 2500.
2. HRA of Rs 3.60 lakh can also be claimed under Section 10 (13A) and LTA of Rs 10,000 under Section 10 (5). With these deductions, your taxable salary will reduce to Rs 7,71,500.
3. If you have invested in LIC, PPF, EPF, or if you have paid your child’s tuition fees, you can claim an additional deduction of Rs 1.50 lakh under Section 80C.
4. Those who have invested in the Tier-1 scheme of the National Pension Scheme are eligible for an additional deduction of Rs 50,000 under section 80CCD. After both these deductions, your taxable income will be Rs 5,71,500.
5. Section 80D allows you to claim tax exemption for premiums paid on health insurance policies. While you can claim Rs 25,000 for health insurance premium for yourself and your spouse or your children.
6. You can claim an additional rebate of Rs 50,000 for the premium paid on the health policies of your senior citizen parents. With this you will get the benefit of deduction of Rs 75,000, due to which your income will reduce to Rs 4,96,500.
These schemes can also give tax exemption
Under the income tax rules, Public Provident Fund (PPF), Employee Provident Fund (EPF), Equity Linked Saving Scheme (ELSS), National Pension System (NPS), Sukanya Samriddhi Yojana (SSY), Senior Citizen Saving Scheme (SCSS) and The benefit of tax deduction is available on fixed deposit (FDs) schemes with tenure of 5 or more. According to tax experts, by investing your savings in these schemes, you can claim tax exemption as per the applicable conditions. Also, with this you can arrange more funds for yourself in the long run. Let us tell you that the last date of ITR file is 31 July 2024.
