Read in: 5mins, Published On , 08 Dec 2021
Are you feeling bad about delaying tax planning? Is your income taxstressing you out? Calm down! Although you must start planning your taxes right from the beginning of the year, you can still reduce your taxable income if you explore the deductions and exemptions available under the Income Tax Act, 1961.
Here are certain investments that can help you lower your tax liability:
You can claim a tax deduction of up to Rs. 1.5 lakh in a financial year under Section 80C and reduce your taxable income. The investments under this section not only provide tax benefits but may also help you grow your money over time since they offer returns. Here are some avenues that you can consider:
Apart from the options mentioned above, you can invest in asenior citizen savings scheme,national savings certificate, a 5-year fixed deposit, etc. to claim a similar tax deduction.
For a detailed comparison of some of the most popular 80C investments, read this article: https://utiswatantra.utimf.com/uploads/infographics/important-things-to-know-about-elss-and-other-tax-saving-investments-0672927001609923911.pdf
Health insurance premiums of a policy purchased for yourself, your children, spouse, or parents also qualify for a tax deduction. [MK5] [MK6] If you are below the age of 60, you can claim a deduction of up to Rs.25,000 for yourself, your spouse, or children. This amount increases to Rs. 50,000 if you are above the age of 60.Moreover, you can also claim an additional deduction of up to Rs. 25,000 for your parents and Rs. 50,000 for senior citizen parents over the age of 60.
Section 80DD and Section80Uboth allow deductions for medical expenses of people with disability. Section 80DDB allows you to claim a tax deduction in respect of the medical expenses incurred for specific ailments for self or dependents.[MK7]
When you contribute to certain relief funds and charitable institutions, you can claim a deduction for the same, subject to conditions.Remember, that not all donations qualify for a deduction. Moreover, not all of these are eligible for a 100% deduction. Some only allow you to make a claim for 50% of the amount.
Subject to certain conditions, you can claim a deduction of up to Rs. 1.5 lakh annually on the repayment of the principal amount towards a home loan under Section 80C. In addition to this, you can also claim a tax deduction of up to Rs. 2 lakh under Section 24 for the interest paid on your home loan[MK8] . Moreover, if you are a first-time buyer, you can claim an additional deduction of up to Rs. 50,000 under Section 80EE. There is also a tax deduction allowed under Section 80E for the interest paid on an education loan. [MK9]
Even though there are ways to reduce your tax liability at the last minute, it is in your favour to plan your taxes in advance. Keep in mind that the goal of savings and investments is primarily to give you financial freedom. Tax saving is only an added advantage and not the main objective. Tax planning, on the other hand, involves much more than merely making tax-saving investments. So, the better you plan, the more financial stability you can enjoy.
It’s March already and you haven’t done already to save tax yet?
Don’t worry! You can still reduce your taxable income.
Here’s what you can do:
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Yes, it’s March already! But no, you don’t have to panic! After all, what are these last-minute tax-saving tips for? (Article to be uploaded on Swatantra Website)
Want to reduce your taxable income at the last-minute but not sure how to go about it? Check out these quick tax-saving tips for March:(Article to be uploaded on Swatantra Website)
[MK1]Review - Its on Rs. 1.5 lakh, not Tax deduction of upto Rs. 1.5 Lakh
[MK2]Under 80 C one can invest upto Rs.1.5Lakh in this whichever tax slab you come under on that basis you get tax deduction for example if I come under 30% tax slab so I get 45000 tax deduction
[MK4]If you invest 50,000 not the entire amount will be taxable. Taxabe income will get deducted from 2,00,000.
[MK6]Premium doesn’t qualify for tax deduction. ow much ever you invest that gets deducted from the taxabale salary.
[MK10]Review as above