Income Tax Deductions: If your salary is above 87 thousand, then you can save your entire income by adopting the trick mentioned here.
Finance Minister Nirmala Sitharaman will present the Union Budget 2023-24 on 1 February. Amidst all this, once again the discussion of Income Tax has started among the taxpayers. According to an estimate of media reports, this time taxpayers can get good news. The exemption limit on income tax can be increased in this budget. In recent times, if your annual income is up to Rs 2.5 lakh, then there is no need to pay tax. However, only time will tell whether taxpayers get some exemption in income tax or not. Here we are telling some ways, with the help of which you can save your entire tax on income up to 10.50 lakhs.
1. What is standard deduction?
If your annual income is between Rs 10 lakh to Rs 20 lakh, then 30 percent of your income tax is deducted. On the other hand, if your annual income is Rs 10.50 lakh, then you get a standard deduction of Rs 50,000. Under this, your taxable income remains only Rs 10 lakh. However, if you do not know what is standard deduction? So let us tell that this is such an income which is deducted directly from your salary and separated. That is, the remaining amount is added under the tax slab. According to sources, now the government can increase it to 70 thousand rupees.
2. Benefit of 80C
Under Income Tax Section 80C, taxpayers can get tax exemption on investment up to Rs 1.5 lakh annually. Under this section, things like PPF, LIC, EPF, ELSS and children’s tuition fees come on which you can be exempted. Apart from this, if you have an ongoing home loan, then you can claim the interest paid on its principal amount. Now you will have to pay tax only on Rs 8 lakh 50 thousand.
3. Tax exemption is available in NPS
NPS comes under 80CCD, you can avail tax exemption by investing in it. If you invest Rs 50,000 annually in this, then now your taxable income has become Rs 8 lakh.
4. Tax exemption on home loan interest
If you have recently taken a house, then let us tell you that you get income tax exemption on the interest and principal amount paid for the home loan. In this, you can get tax exemption on interest deduction up to Rs 2 lakh annually under 24B. Now in this way your taxable income is reduced to only Rs 6 lakh per annum. That means there will be less tax on it.
5. Medical Health Insurance
Now if you want to avoid paying tax even on income of 6 lakhs, then you can take medical health insurance. This insurance comes under Section 80D of Income Tax, on which you can claim Rs 75,000. Apart from this, you can also take medical health insurance of 50 thousand rupees in the name of your parents. Now your income has become 5 lakh 25 thousand rupees. At the same time, you can give 25 thousand rupees to any NGO or trust to pay zero income tax. You can claim it under 80G. After this your income will be 5 lakh rupees. Now you will not have to pay any kind of income tax.
