Tax Saving Tips: Salaried people earn a fixed income every month. In that too, a good part of their salary goes in paying income tax. But if you do not want to lose your hard-earned money in tax, then you will have to do proper tax planning for it. If you have not been able to do this this year, then do not regret because the new year will definitely start from January 1, but the new financial year will start from April 2025. In such a situation, if you do tax planning from the new year, then you will save a lot of money. Here know the ways that can be helpful for you in this matter.
Invest under section 80C
This section is the easiest and most popular way to save your tax. In this, you can claim a deduction of up to ₹ 1.5 lakh. Public Provident Fund (PPF), ELSS (Equity-Linked Savings Scheme), National Savings Certificate (NSC), Sukanya Samriddhi Yojana (SSY) etc. are many such schemes in India, by investing in which you can get tax benefits under 80C.
Invest in National Pension System (NPS)
NPS can also prove to be a better option in terms of saving tax. Investment in NPS is tax exempted under section 80CCD of Income Tax. It also has two sub-sections – 80CCD(1) and 80CCD(2). Apart from this, 80CCD(1) has another sub-section 80CCD(1B). You can get a tax exemption of Rs 1.5 lakh under 80CCD(1) and Rs 50,000 under 80CCD(1B). Now, apart from this exemption of Rs 2 lakh, you can get more exemption in income tax through 80CCD(2).
Tax benefits on home loans
Even if you have taken a home loan to buy a house, you can save your income tax. Under section 24(b), you can claim a deduction of up to ₹2 lakh on home loan interest. Under section 80C, a deduction of up to ₹1.5 lakh can be claimed on principal repayment and if you have bought a house for the first time, you can avail additional benefits under section 80EEA.
Save tax on health insurance
Under Section 80D, you can claim tax deduction on health insurance premium for yourself, your family and parents. Up to ₹25,000 can be claimed as deduction for family and up to ₹50,000 for senior citizen parents.
Education and tuition fees
Under Section 80C, a deduction of up to ₹1.5 lakh can be availed on children’s school or college tuition fees.
Deduction on interest under Section 80TTA
Up to ₹10,000 can be claimed as deduction on interest earned from savings account under section 80TTA.
Avail Leave Travel Allowance (LTA)
There is another way for salaried employees to save tax. The money received as LTA is tax free. There is a provision under the Income Tax Act, 1961, which allows salaried employees to claim tax exemption on expenses incurred for domestic travel. According to Section 10(5) of the Income Tax Act, the amount of LTA received from your previous or current employer is eligible for exemption if certain conditions are met. But this benefit will be available only to those who are employed and who get LTA from their employer.
Tax exemption on HRA (House Rent Allowance)
If you live in a rented house, you can claim tax deduction on HRA. There are three conditions regarding HRA. The first condition is that it should be 40/50 percent of your basic salary. The limit is 50 percent for metro cities (Delhi, Mumbai, Kolkata and Chennai) and 40 percent for non-metro cities. The second condition is how much HRA the company is giving you and the third condition is how much rent you have actually deposited – minus 10 percent of the basic salary. The minimum amount in the three conditions will be eligible for tax exemption.
Exemption on donation under section 80G
Under Section 80G, every Indian citizen who has invested in a fund, institution or organization recognized by the government can claim tax exemption. In this, you can claim tax exemption on donations up to Rs 2,000 in cash, but if the amount is more than Rs 2,000, then you will have to use a check, demand draft or other payment mode.
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