There is a large group of whole legitimate ways of saving tax under the Income Tax Act, 1961. These include tax-saving mutual assets, NPS, insurance expenses, medical insurance and many others. In this article, we spread all the major tax deductions under the Income Tax Act
1. Go through your Rs 1.5 lakh limit under Section 80C
The below-referenced investments/deductions are all dependent upon a cap of Rs 1.5 lakh. In other words, they are either/or investments and making one sort of the investment will decrease space for another:
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2. PPF (Open Opportune Store): Open Fortunate Reserve is a legislature established savings conspire with a residency of 15 years available at most banks and mail depots in India. Its rate changes each quarter, however, is as of now 8%. The interest on PPF is without tax..
3. NSC (National Saving Certificate): A National Savings Certificate has a residency of 5 years and a fixed rate of interest. The rate is presently 8%. The interest on NSC is also automatically tallied towards the Rs 1.5 lakh 80C cutoff and is tax-deductible if no other investments are using up the breaking point.
4. Life coverage Expenses: Charges for various kinds of insurance arrangements including ULIPs, term insurance and blessing strategies are tax-deductible up to Rs 1.5 lakh. Anyway, the insurance spread must be at least multiple times the annual charge.
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5. National Benefits Framework (NPS): This deduction is available under Section 80CCD up to Rs 1.5 lakh for commitments to NPS. This is well beyond the Rs 50,000 deduction available under Section 80CCD(1B)
6. Home Loan Repayment: Repayment of the principal amount on a home loan is tax-deductible up to Rs 1.5 lakh per annum.
7. Payment of education costs: Payment of education costs for your kids is tax-deductible up to Rs 1.5 lakh per annum.
8. EPF: Under the EPF Act. 12% of the pay of workers in the organized sector is deducted towards Representatives Fortunate Store. This deduction checks towards the Rs 1.5 lakh limit under Section 80C.
9. Senior Residents Savings Plan: Commitment to the SCSS is tax-deductible up to Rs 1.5 lakh. SCSS has a residency of 5 years and is available to those above 60. The rate for SCSS is higher than prevailing FD rates and is as of now 8.7% (it is taxable).10) Pay Health Insurance Premiums
10) Pay Health Insurance Charges
A deduction up to Rs 25,000 is available for health insurance charges under Section 80D. This is far beyond the deductions listed above. For senior residents, this cutoff is increased to Rs 50,000. Individual contributing health insurance for himself and senior resident parents can avail of the combined deduction up to Rs 75,000 for every annum.
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11) Get a deduction on your home lease/rent
You can claim tax deduction on your Home Lease Allowance (HRA) in the event that you get HRA. There is no furthest breaking point for this except for there is a lot of decides that cap the maximum HRA deduction. In the event that you don’t get HRA yet pay lease, you can claim a deduction under Section 80GG up to Rs 60,000 for each annum.
12) Get a deduction on the interest on your home loan
If you have a home loan, the interest payable on it is tax-deductible under Section 24 of the Income Tax Act up to Rs 2 lakh per annum. If you give out the house on rent, there is no upper limit. However, the total loss that can be claimed on the broader head of income from house property is capped at Rs 2 lakh.
13) Keep some cash in your savings account
This is probably the easiest deduction under the Income Tax Act that individuals can claim. Interest on savings accounts is sans tax up to Rs 10,000 every year under Section 80TTA. This breaking point is Rs 50,000 for senior residents for both FD and savings account interest under Section 80TTB..
14) Add to charity
You can get a tax deduction on your charitable donations. There is no upper limit but different rules restrict the tax deduction amount available on your charitable contributions. For most donations to NGOs, the limit is 50% of the donated amount and up to 10% of your adjusted total income. NGOs under this section are required to have an 80G certificate for you to be able to claim this deduction.