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One of the primary goals of tax planning is to direct cash from taxable sources to various income-generating schemes. This guarantees that money is used efficiently for beneficial purposes.
The goal of every taxpayer in India is to lower their tax burden and save money for the future. It is possible to minimise the amount of tax you owe if you invest in accordance with Income Tax Act of 1961 provisions. The Act includes numerous tax planning investment options that can considerably decrease your tax obligation.
Ways of tax planning to save income tax in India.
Enjoying tax benefits by availing home loan under section 80C
You cannot only get the satisfaction of ownership of a home but also the low tax responsibility by availing home loan opportunities. Many housing schemes are working to make affordable housing in India like Delhi development authority and Pradhan Mantri Awas Yojana etc.
Section 24b and 80C reduces the tax monetary responsibility. You can also benefit from section 24b ,if you purchases the property for home construction. But you should complete home construction within 5 years. You can also declare additional deductions through the 80C section if you are a first-time homeowner.
You can get a higher return through undertaking investment. It is a capital market and here government directive schemes help to get tax benefits and higher returns. By investing in different instruments you can get knowledge about saving income tax in India. You can choose stock market investment tools if you are prepared to manage risk factors. Like, Equity-linked saving schemes.
You can get this tool with a three-year lock-in period and its total investment for eligibility of tax remission is up to 1.5 lac INR. In case of gaining capital below 1 lac INR, there is no tax to pay on profit.
Invest your money in Government projects
Many government-authorized projects provide high returns on total investments along with tax abdication. Individuals can demand up to 1.5 Lakh rupees spent on such investment as tax refusal on total annual income, under Section 80C of the Income Tax Act.
Buying health insurance policy
Today health insurance has become a necessity for people because the medical cost is rising due to bad health conditions that are the cause of many factors. Health insurance helps to reduce the financial burden of people at the time of the bad condition of health. Government extends the tax benefits for refreshing people about insurance policies. Due to health insurance, people can get quality health treatment in top medical institutions with low charges.
Contribute to the national pension system
This is the deduction above 50,000 RS that is only available for contribution to the NPS under the 80CCD section. The national pension system allows deducting in fairness and these funds are built for retirement aggregation . You can withdraw these funds at the age of 60.
Donate to charity
You get free income tax waiver of 2000 rupees of if you contribute to specific organizations in cash under Section 80G of the income tax. You can contribute through the wire and bank transfer; on the other hand, they enjoy complete or partial tax immunity, respectively.
If you are contributing to an organization assisting scientific research or rural development, you are allowed to enjoy deductions under Section 80GGA.
Support a political party
You get free income tax exemptions if you contribute to your preferred political party or give donations to electoral trusts under Section 80GGC of the Act of 1961.But do check that given the organization is registered under Section 29A of the Representation of People Act of 1951.
But you cannot do these contributions through cash deposits; you need to make these contributions or donations through wired or bank transfer.
Deduction on your rent
You can also avail yourself of a tax deduction opportunity on home rent allowance. If you get a home rent allowance there is the asset of rules that covers the maximum deduction. But if you pay to rent and do not get a home rent allowance then you will get above 60,000 RS deduction per annum under the 80GG section.
Keeping money in your saving account
This is a very easy deduction for each individual . You can save money in the range of 10,000 to 50,000 free of tax per year under the 80TTA section.
Some Other options of tax planning
to save income tax in India
All the methods described above will give an idea about how to save income tax in India. Except these some other options should be kept in mind to save income tax, such as:
● Under Section 80E, you can give up any tax payment on the interest component of education loans. But these benefits are only allowed for the first eight years of loan repayment.
● If you are disabled,(disability about 40% or higher than this), you can avail of tax relaxation of Amount up to 75,000 .
According to Section 80U ,income tax waiver is allowed to finance the expenditure of individuals having disability about 40% or higher than this.
● On medical expenses or medical bills, you also can get tax relaxation according to rules in the Act.
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