7 Ways Salaried Individuals Can Save Taxes
Struggling to say goodbye to your money through taxes? We will help you save them instead.
The end of the financial year is always marked with us sitting with the bills and trying our best to minimize taxes. While you would think a huge portion of what is rightfully yours is snatched away from you in the name of taxes, knowing the laws and procedures can help you save much and use the money in a better way. The Income Tax Act offers a lot of inducements and grants, and we bring you a few clever tips to help you save a lot.
Salary Restructuring helps save taxes
If you are lucky and the company you work in permits, you could restructure some components and save a lot on your tax. For example, opting for food vouchers gives you an exemption of up to ₹ 50 per meal. You can also include transport, medical and education allowance, and produce bills to get the returns at the end of the financial year.
Save tax by making use Of Section 80C
Section 80C gives you a maximum supposition of ₹ 1,00,000. You can invest your money in the following ways-
Life Insurance Premium
Public Provident Fund
National Savings Certificate
Equity Linked Savings Scheme
5 year fixed deposits in post office and banks
Tax saving options other than 80C
If your amount exceeds the limit of section 80C, here are a few options you can consider. Section 80D – allows a deduction of ₹ 15,000 on medical insurance, including your spouse and children, and ₹ 20,000 for your parents above the age of 65 years.
Claim HRA (House Rent Allowance)
If you are not given a house rent allowance from your company, you could claim25% of the total income of 2,000 per month. However, you cannot claim it if your spouse or children own a house in the location near your workplace.
Saving from home loans
Your home loan can be an effective tool to save more tax. The principal component of section 80C is a deduction of ₹ 1,00,000. The interest also allows a deduction up to ₹ 1,50,000 discretely under Section 24.
Leave Travel Allowance allows for tax exemption
If you have not used your travel allowance, you can block it and carry it forward to the following calendar. There are three exemptions allowed on the block.
How to save tax on bonus
If you want to save on the tax on your bonus, make sure your produce your investment in details much before you receive the extra amount.