Tips To Save Income Tax on Salary

Tips To Save Income Tax on Salary

You must pay special attention to the various tax-save financial solutions if you want to save

a significant portion of your income in India. Sections 80C, 80CCD, and 80CCC allow

salaried professionals in India to reduce their tax burden.

If you seem like you have been paying a significant amount of the earnings on taxes, probably,

you haven't budgeted your taxes adequately. You may reduce your tax liability in several

lawful ways. The income tax return online enables taxpayers to reduce their tax burden by

utilizing deductions, which individuals may use when completing their tax returns. The

following advice will assist you in reducing your tax liability:

Deductions allowed under Sections 80C, 80CCD and 80CCC

Under these three divisions, Indian citizens may save on taxes. People might be able to

deduct some expenses if they placed their funds in the items listed in Sections 80C, 80CCD,

and 80CCC. PPF Accounts, Public Pensions, Life Insurance Policies, National Savings

Certificates (NSC), 5 Years Tax Relief Fixed Deposits, etc., are just a few prominent

investment vehicles. People may deduct the most under any part, or all three sections are

Rs. 1,50,000. People may deduct an extra Rs. 50,000 per Section 80CCD if they invest in

the National Private Pension.

Costs of Medicine

Taxpayers may deduct medical expenses from their taxable income. Medical costs become

income for patients who furnish their healthcare invoices. Additionally, businesses provide all

workers with a medical allowance. A person may only claim up to Rs. 15,000 per year in

health bills. Sections 80D, 80DDB, and 80DD of the tax code provide deductions for

expenses made by taxpayers to purchase health insurance for themselves or a family

member. Depending on the kind of insurance plan the taxpayer has acquired, the deductible

amount may change for each component.

A Mortgage

Most individuals are encouraged to take out a house loan to reduce their tax liability since

they may qualify for three different types of deductions that can provide substantial tax

savings. If someone takes out a mortgage loan, they can deduct interest payments under

Section 80c Income Tax. People may reduce the interest on the home loans they've paid

under Section 24. In some circumstances, a deduction of a maximum of Rs. 2,00,000 may

be made from the amount used to cover the interest on a house loan, whereas, in other

circumstances, there is no upper limit.

Equity and Mutual Funds

If people put money into shares & mutual funds, then they may avoid tax. Citizens earning

less than Rs. 12 lakhs yearly are eligible for an extra deduction per Section 80CCG of the

Income-tax Act if people invest inside the stock of particular firms and even certain managed

funds. Only first-time investors are eligible for the deductions offered under the Rajiv Gandhi

Equities Savings Scheme.

Capital Gains over Time

Suppose a taxpayer receives long-term investment income through the sale of any long-term

financial asset and subsequently invests those proceeds in specific securities. In that case,

they will be able to reduce their tax liability. Long-term capital is any asset the taxpayer has

held for more than three years.

Trading of Equity Shares

The government of India has waived tax on just about any long-term profits consumers make from selling equity shares to entice them to invest in both mutual funds & equity shares. Only those who retain such assets for some time greater than one year are immune from tax.

These are a few of the often-used strategies for tax-related cost savings during itr filing. A

significant amount of money may be saved by taxpayers if individuals carefully arrange their

income, assets, spending, and taxes. Avoid using unlawful methods to reduce your tax

liability. For instance, if someone tries to avoid paying taxes, their income will be regarded as

illegal funds or black money, whereas, if discovered, it may cause several problems.