How to save tax in India? The Income Tax Act offers many more incentives and allowances, apart from the popular section 80C, which could reduce tax liability substantially for the salaried individuals. Here, are some smart tips to help you save more and reduce taxes. These can help you in reducing your tax liability up to Rs.90000/-
1.Interest on Saving Bank Account- Section 80TTA
Individual and HUF is eligible for deduction under section 80TTA. Deduction Claim under section 80TTA for Interest on Saving Bank Account is Limited to Rs.10000/- Per Person. Normally, every member of family has their saving bank account. However, if you have a two saving account even though, you can claim only Rs.10000/- under this section.
Hence, Deduction claim under section 80TTA for Income by way of interest on deposits in a saving account.so, you can open Saving Account with a Banking Company, a Post Office and a co-operative society. Section 80TTA is best option to save tax.
Notes: Interest on time deposits is not covered under section 80TTA.
2.Medical Insurance Premium- Section 80D
Individual and HUF is eligible for deduction under section 80D. Self, Spouse and dependent children of the assesse is claim deduction of Rs.25000 under this section. Also, Rs.30000 deductions is claim for the Senior citizen.
However, the deduction for the payment on preventive health check-up for self, spouse, dependent children, and parents shall not exceed in the aggregate of Rs.5000.
hence,Payment made for medical expenses is also claim as deduction under section 80D in case of Super Senior Citizen. Thus, save tax under this section on total amount of Rs.60000.
3.Interest on Education Loan- Section 80E
Deduction under this section for Interest paid on loan taken from any financial institution. Loan taken for pursuing higher education.
There is no limit of amount to be claim as deduction. Therefore, the deduction shall be allowed only for the interest paid on such loan. so,Deduction not allowed for principal amount under this section.hence, payment of interest should be paid out of his income chargeable to tax. hence, Deduction claim for 8 Assessment year starting from the year, when assessee starts paying the interest or until the interest is paid in full, whichever is earlier. as a result, you can save tax.
4.Income from Royalty- Section 80QQB
Resident individual being un Author or joint author of a book can claim deduction under section 80QQB.
Hence, Deduction shall be allowed for the Income receive in form of royalty, copyright fees or any lump sum consideration receive by the author. so,Maximum amount of deduction is allowed is Rs. 300,000. because, Author can save tax by exercising this section.
5.Housing Loan- Section 80EE
Individual can claim deduction under this section. and Interest payable on loan taken from any financial institution for the purpose of acquiring residential house property. Maximum amount of deduction is allowed is Rs. 50,000. due to this deduction is in addition to the deduction claim under house property. This is a best way to save tax in India. Because in today’s words, everyone has a dream of own house.
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