Tax saving Tips: These 5 tax saving tips are a boon for employed people, this way you can save lakhs of rupees
Be it a salaried person or a businessman, everyone is trying to save income tax by trying their own ways. Saving tax is always a challenge for working people. They need to plan their monthly expenses along with savings, investments and retirement. Understanding this need, here are five ways to help you save on income tax easily.
The last date for filing ITR for the financial year 2023-2024 is July 31, 2024. According to the income tax slab, if a person has opted for the old tax system, then he will not have to pay any tax on income up to Rs 5 lakh. Whereas in the new tax system there is no tax on income up to Rs 7 lakh.
Be it a salaried person or a businessman, everyone is trying to save income tax by trying their own ways. Saving tax is always a challenge for working people. They need to plan their monthly expenses along with savings, investments and retirement. Understanding this need, here are five ways to help you save on income tax easily.
You can avail tax exemption on home loan
If you have taken a home loan, you can get tax exemption on its principal amount under section 80C. You can also get exemption on home loan interest under section 24(B) of the Income Tax Act. If the property is self-occupied, then tax exemption can be claimed on interest up to Rs 2 lakh.
Employee Provident Fund (EPF)
One of the easiest tax saving options for salaried people is the Employee Provident Fund (EPF). It provides tax exemption of up to Rs 1.5 lakh under Section 80C of the Income Tax Act. Interest up to Rs 2.5 lakh received annually in a PF account is tax free.
House Rent Allowance (HRA)
House Rent Allowance (HRA) is an allowance given to employees to pay their house rent. Under Section 10(13A) of the Income Tax Act, tax exemption on HRA can be availed subject to certain limits. For those living in metro cities, up to 50% of the basic salary and for those living in smaller cities, up to 40% and 10% of the total annual income can be claimed as tax on paying house rent.
Health Insurance Policy
Under Section 80D of the Income Tax Act, if you pay premium for health insurance, you get tax exemption. If you have a health insurance policy for your spouse, child and parents, you can claim tax deduction on premium up to Rs 25,000. If your parents are senior citizens, the tax exemption limit increases to Rs 50,000.
Opportunity to claim tuition fees
You can get tax exemption on the tuition fee portion of the school/college fees for your children's education. A provision under section 17 of section 80C of the Income Tax Act allows parents paying tuition or school fees to claim tax exemption. This can be availed for the tuition fees of up to two children. To get this exemption, you have to submit the admission certificate and fee receipts from the institute.