Income Tax Saving Tips: You also work and want to save tax, adopt these five methods quickly..
Those who are employed should start tax saving as soon as the income tax return (ITR) filing season starts. There are many schemes on which we get the benefit of tax exemption. Let us tell you about some such methods (Tips for tax saving), through which you can easily save your tax.
1. House Rent Allowance
House Rent Allowance. HRA is such an allowance, which is given to the employees to pay the rent of their house. Your company also pays HRA along with your salary. Under Section 10(13A) of the Income Tax Act, tax exemption on HRA can be availed subject to certain limitations.
-Tax exemption on total income in the form of HRA.
- Up to 50 percent of the basic salary for people living in metropolitan cities, and up to 40 percent of the basic salary for people living in small towns.
- On paying 10 percent of total annual income as house rent
After calculating these three facts, you can use the lowest amount for HRA tax exemption. Apart from this, tax saving on the income in the form of HRA can be done only by a working person whose salary includes HRA and who lives in a rented house.
To get this discount, you have to give a tenancy agreement or house rent receipt.
2. Home Loan
If you have taken a home loan, then you can avail tax exemption on its principal amount under 80C. Apart from this, you can also avail discount on home loan interest. You can avail of this exemption under Section 24 (b) of Income Tax. According to income tax rules, tax exemption can be claimed on interest up to Rs 2 lakh. However, this tax exemption will be available only if the property is 'Self-Occupied'.
3. Tuition Fees
You can avail tax exemption on the tuition fee portion of the school/college fees you pay for your children's education. Under Clause 17 of Income Tax Section 80(C), there is a provision for exemption in income tax to parents paying tuition fees or school fees. This discount can be availed on the tuition fees of two children. But to get this discount, you will have to produce admission proof and fee receipts from the institution.
4. Health Insurance Policy
Under Section 80D of the Income Tax Act, if a taxpayer pays the premium for health insurance, he gets a tax exemption. If you have taken a health insurance policy for yourself, your spouse, children, and parents, then you can claim tax on the premium up to Rs 25,000. In this case, the age of the parents should be less than 60 years. If your parents are senior citizens, then the tax exemption limit will be Rs 50,000.
Let us tell you that for salaried people, one of the easiest options to save tax is the Employees Provident Fund (EPF). In this, tax exemption up to Rs 1.5 lakh is available under Section 80C of the Income Tax Act. Interest received in PF accounts up to Rs 2.5 lakh annually remains tax-free.
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