Here we have listed down the 5 ways of how one can do the taxes without paying a single extra dime.
Do Your Taxes Without Paying an Extra Dime: Do you want to Pay your Income tax without an extra dime? Then, you can save a lot of money by following the tips mentioned here to save on tax. You can choose any method to save tax, but you must ensure it’s the right one. At the time, people just stuck out on one way of saving the tax, but in doing so, they missed out on productive methods to save the tax.
What Should You Know About Income Tax?
Income tax is ideally a proportion of the income you must pay to the government. On an annual basis, the income tax is collected. The authorities generally use this money to perform various administrative tasks.
In 1961 the Income Tax Act came into existence, and everything regarding age recovery collection administration falls under the income tax act purview. Being a taxpayer, you need to have different sources of income during your life. Your earnings and profits in any financial year attract taxes per the Income Tax Act 1961.
Whether you are a salaried person or an entrepreneur, if you have to make a rental income or on income from the investment, you need to pay the taxes to the Government of India. Section 80 C, section 80 d, and section 80 g of the Income Tax Act lists how you can save taxes.
How Can You Save Income Tax Expenses In India?
By Claiming The Expense:
You have to start claiming the expense you made to save the income tax.
By Investing In Different Tax-Saving Instruments
The government mainly encourages people to save tax by investing the money in tax-saving tools, which are already listed under section 80 see of the current Income Tax Act. By doing so, you can be assured that you have some investment, and there is no need to worry about too many funds spent on paying taxes.
Tips To Save Money Legally in India
Some ways will help you save money for taxes in the current year.
Choose section 80C
This section reduces all the tax liabilities, why alarming son reductions from the total taxable income in the financial year. You can claim the deduction benefits on any investment payment or contribution towards financial products and schemes stipulated by the income tax law. It includes equity link saving schemes where mutual funds have a lock-in term of 3 years.
It’s the only mutual fund category likely to qualify for a tax deduction from the Income Tax Act. In addition, you can choose the senior citizens saving scheme as this option is a risk-free tax-saving investment. It is a long-term saving option that the Indian government backs.
You can claim deductions of around 1,00,000 under this section of the Income Tax Act. It is mainly for a contribution towards medical insurance premiums you have bought to insure yourself, children, spouse, or parents. The benefits can be claimed by all individuals and the Hindu undivided family.
You can claim the deductions to ensure yourself. In a financial year on the health insurance premium, you can claim a maximum reduction of 25,000. You can claim a decrease of 50,000 per year if you are a senior citizen.
This section is the amount you end up repaying the interest of your education loan. It qualifies as a reduction in the total income. This is the loan you would have taken for the education of yourself, your children’s spouse, or a student for whom you are a legal guardian. It must be taken from the bank and approved financial institution.
The total amount you are repaying is the interest in the financial year, known as the reduction amount, and there is no maximum cap on this amount when it comes to reduction. Firstly you need to get a certificate from the bank that differentiates the principal and interest amount of the education loan, which you have already repaid.
Charity mainly begins at home, but you also need to know that if you widen the scope of the charitable act, you can save taxes. Section 80 g of the Indian Income Tax Act allows you to easily claim deductions on all the donations that you made to charitable organizations.
But you need to know that contributions that are made towards charitable institutions which are already registered under section 12 can be qualified for the deductions under 12 A of the Income Tax Act. The donations will be eligible if they are made through cash checks or demand drafts.
All taxpayers are eligible for tax deductions, including non-resident Indians. However, you cannot go for a deduction if the cash donation is more than 2000. The contribution needs to be made through another payment mode if the donation is more than INR 2000. The different reductions eligible for allowed 100% or 50% with uneven without restriction under section 80 G of the Income Tax Act.
Claim your exemptions if you are living on a rented property
Tax exemptions are available under house rent allowance, granted under section 10 of the Income Tax Act. The salary breaks up should include the house rent allowance exemptions on the rent which is paid and should be calculated as the minimum value of 3 elements which is stated as annual house rent allowance received 50% of the salary yearly if the person is residing in any metro city.
You can claim the tax benefits on the yearly rental expense if the monthly income does not include the house rent allowance.
All these factors mentioned here will help you reduce your total taxable income for the given financial year and also help you know more about the different government provisions mandated.
Ensure you submit the income tax return form your employer provides to get the subsequent returns. Tax saving can be made easy with these tips mentioned here.
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