Income Tax Tips: These are 5 great ways to save income tax, lakhs will be saved..

You get an exemption on income tax under popular sections of the Income Tax Act 1961 like 80C, 80D, 80G, 80DD, etc. However, many other options can help you in saving your tax. However, it is worth noting that the tax benefits are for those who are linked to the old tax regime.

Deduction for pre-nursery
You can get tax exemption on payments spent on your children. This includes expenses related to playgroup, pre-nursery, and nursery fees. Although it was introduced in 2015, this tax benefit is not as widely recognized as the deduction available for school tuition fees.

     Section: 80C.
      Maximum allowable deduction: Rs 1.5 lakh.
     Caution: Benefits are limited to two children.

Reinvest PPF money to save tax
Use your Public Provident Fund (PPF) account for tax-saving investments this year. You can make a partial withdrawal from your PPF account from the seventh financial year.

     Section: 80C
      Withdrawal limit: Under the PPF scheme, a loan facility is available from the 4th year, and a withdrawal facility is available from the 7th year.

Tax saving from stamp duty
You can save tax by claiming tax deductions on stamp duty and registration fees while buying a house. This is especially beneficial for individuals taking home loans at the end of the financial year. Because the share of the principal amount is relatively less in the initial years.

      Section: 80C
     Maximum allowable deduction: Rs 1.5 lakh
     Be careful: Make sure to secure the deduction in the financial year of the property purchase as it cannot be availed later.

Pay interest to parents
Consider paying interest on the loan you took from your parents to buy a house. It is important to note that the deduction given on home loan interest is not limited to loans taken from banks or housing finance companies. This strategy can be especially beneficial if your parents fall into a lower tax bracket.

     Section: 24B
     Maximum allowable deduction: Rs 2 lakh

Renting to parents gives a tax deduction
If you live in a house owned by your parents, consider paying them rent and documenting the transaction. By doing this, you become eligible for a House Rent Allowance (HRA) exemption.

PC Social media