Tax Saving Tips: It is important for any taxpayer to have information about deductions and exemptions to save tax. Many times, taking thoughtful decisions reduces tax liability. Financial planning becomes easier. By being aware of these pitfalls, you can decide whether to claim all the deductions and benefits you are entitled to. With this you can save a lot of tax every year.
Taxpayers have the option to save tax under 80C. Under this, you can save money by investing in options like PPF, ELSS, NSC and EPF. If you are not aware of its intricacies, you may miss out on saving a lot of tax. These types of mistakes should be avoided while filing taxes
Not knowing about deductions: Section 80C of the Income Tax Act provides many avenues for tax saving investments like Public Provident Fund (PPF), Equity Linked Saving Scheme (ELSS), National Savings Certificate (NSC) and Employee Income Tax Scheme. In this you can save Rs 1.5 lakh annually.
Not availing House Rent Allowance (HRA): If you are a salaried class individual taking HRA as part of your salary, you can claim exemption on rent paid subject to certain conditions. You may miss out on this tax saving by not submitting rent receipts or documents to your employer.
Health Insurance Premium: Premium paid for health insurance policies for self, spouse, children and parents is eligible for deduction under Section 80D. Tax liability may increase if you do not avail this deduction.
Non-utilisation of NPS (National Pension System) benefits: Contributions made to NPS are eligible for tax deduction under section 80CCD (1B) if they exceed the limit available under section 80C. Not availing this additional deduction may result in missing out on tax saving opportunities.
Last Minute Tax Planning: Procrastination Is Expensive! Don’t wait till March to invest for tax savings. Invest in the scheme in the beginning itself so that you can earn tax free interest also.
