Tax Saving Options: Many times you come under the tax net due to having a little extra money. In such a situation, if you want, you can remove yourself from that scope. In simple language, there are 5 such effective tax saving techniques available that even if there is money in the account, the government will not be able to collect tax from you. Let us know.
Top 5 Tax Saving Schemes: The budget for the financial year 2023-24 has been presented. Middle class salaried and other earning individuals are busy calculating their tax saving options which they can use to save more than the Rs 7 lakh annual limit. The method we will tell you today can be availed only under the old income tax system, those who want to claim these benefits will need to choose the old tax system, because from April 1, 2023, the new income tax system will be applicable for an earning person. There will be a default tax arrangement for. Let us tell you, in this time’s budget, the Government of India has announced a new tax system, in which taxpayers have been given the exemption of not paying any tax on earnings up to Rs 7 lakh. In the old scheme it used to be Rs 5 lakh. However, there is still freedom to choose the old tax system.
These are the top-5 tax saving schemes
NPS
An earning individual in the National Pension System (NPS) scheme is given an additional tax deduction of Rs 50,000 under section 80CCD (1B). So if an earning individual has exhausted his investment limit of Rs 1.50 lakh per annum, he can claim income tax exemption on his investments in the NPS account under this section. In this, tax exemption can be claimed on investments up to Rs 50,000 in a financial year.
Health insurance premium
Under Section 80D of the Income Tax Act, a taxpayer can claim tax exemption on the premium paid on health insurance. The exemption ranges from Rs 25,000 to Rs 1 lakh in a financial year. A taxpayer is allowed to claim tax exemption on health insurance premium up to Rs 25,000 if he is below 60 years of age. If the taxpayer is paying health insurance premium for his/her parents who are below 60 years of age, the taxpayer is also eligible for additional tax exemption on health insurance up to Rs. 25,000 paid for the parents. Can claim.
In case the parents are senior citizens, this limit increases to Rs 50,000 per year. However, in both cases both parents and children cannot claim tax exemption on the same health insurance premium. It is mandatory to have separate health insurance here. However, if the taxpayer is a senior citizen, in that case the annual limit of Rs 25,000 goes up to Rs 1 lakh. So if a taxpayer is a senior citizen and he is paying health insurance premium for his parents also, then in that case the taxpayers can avail tax exemption up to Rs 1 lakh (Rs 50,000 for himself and Rs 50,000 for parents). Will be able to claim.) Can claim under section 80D.
Tax exemption on home loan
A taxpayer paying home loan EMI can claim tax exemption of up to Rs 2 lakh on home loan interest paid. However, the home loan borrower must reside in the unit or be self-occupied.
Interest on deposits in savings account
Under Section 80TTA, savings account holders can claim TDS exemption on interest up to Rs 10,000 in a financial year. This amount is applicable to all bank savings accounts. So if one has more than one savings account, taxpayers are advised to calculate the entire savings account interest of all the bank accounts. In case of senior citizens, this limit under section 80TTB is Rs 50,000.
On donating to charitable institutions
Under Section 80CCC, if taxpayers have made donation payment to an approved charitable institution, then in that case the person can claim tax exemption under Section 80CCC. However, in case of donation in cash the limit is capped at Rs 2,000. Therefore in case of donation more than Rs 2,000, payment should be made through bank cheque. But, paying only through check will not suffice as you need a receipt stamped by the Trust mentioning its address for donation, PAN card details along with the name of the Trust written on it. Only then can you claim tax exemption.
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