Despite the availability of many means of investment to save tax, taxpayers fail to take advantage of them. Let us tell you some special ways to save tax
Every citizen earning more than the fixed limit of income tax in the country has to pay tax (Income Tax Liability) and it is legally mandatory. Although, the government also gives relief to tax payers to save tax, but due to not planning at the right time, the person has to pay the full tax and he is not able to take advantage of the many reliefs available.
Most people approach a chartered accountant or a tax consultant for tax planning. However, for this they have to pay fees. But you can save money by doing tax planning even while sitting at home. Let’s know how?
Despite the availability of many means of investment to save tax, taxpayers fail to take advantage of them. The result of this is that they have to pay the full tax. Every person has to file ITR ie Income Tax Return for tax related “assessment”. In which one submits ITR to record his income and tax information for a financial year. Let us know what are the options in which you can get a good tax benefit by investing-
Better investment as well as tax saving benefits
To save tax, most people prefer to invest in Public Provident Fund. Because in this, tax deduction is exempted under section 80C of the Income Tax Act. The minimum investment in this scheme is Rs 500 while the annual investment limit is Rs 1.5 lakh. PPF account has a lock-in period of 15 years which can be extended 2 times for a period of 5 years after maturity. The special thing is that it is one of the government-backed high interest paying schemes.
Benefit of tax exemption from donation amount
The amount donated to various relief funds including the Prime Minister’s Relief Fund and other charitable organizations provides tax deduction benefits under section 80G. To claim tax exemption while filing income tax return, you will have to provide documents related to the donated amount.
Reimbursement of travel expenses
Reimbursement of travel expenses is covered under Section 10(5) of the Income Tax Act, which is known as Leave Travel Allowance (LTA). LTA is a benefit provided by a firm to an employee which pays the domestic travel cost for the employee and their family when they are on leave.
Claim the amount spent on specific ailments
Medical expenses due to certain diseases including thalassemia, kidney failure, cancer, or other life-threatening diseases are eligible for tax refund under section 80DDB of the Income Tax Act. The compensation includes the expenses incurred by the patient or his dependents which have been paid for the treatment of the particular disease.
Also allows tax deduction on home loan interest payment under section 24B, payment for health insurance premium under section 80D and house rent under section 80GG
