Income Tax Return: Under Section 87A of Income Tax, no tax is liable to be paid on income up to Rs 5 lakh. In such a situation, if your income is Rs 10 lakh, then first of all, by getting relief under 87A, your tax liability will be made on Rs 5 lakh only.
The last date for filing income tax returns for the financial year 2021-22 or assessment year 2022-23 is 31 July 2022. Now only a few hours are left for its last date to end, so if you have not filed your return then you should file it without wasting any time. Before filing the return, complete information about saving in tax should also be known. Let us know how people earning up to ten lakh rupees annually can save their entire income tax.
Tax deduction is available under many provisions coming under income tax, but the most popular of these is 80C. Employed people get the most benefit from this. Apart from this, home loans, education loans and insurance policies under subsection 80CCD(1B) can help you save tax. Let us know how we should make our strategy to save tax.
Standard Deduction (Rs 5 lakh)
First of all, it is important to know that under section 87A of Income Tax, income up to Rs 5 lakh is not liable to any tax. In such a situation, if your income is 10 lakh rupees, then first of all, as per the relief under 87A, deduct five lakh rupees from 10 lakh, then the tax liability on you will be made only on the income of five lakh rupees. Apart from this, salaried people and pensioners get the facility of standard deduction of Rs 50,000. On this basis, Rs 50,000 is further reduced and the tax liability on you comes to an income of Rs 4.5 lakh.
80C Deduction (Rs 1.5 lakh)
Under Section 80C of the Income Tax Act, income tax exemption can be availed on investments up to Rs 1.5 lakh per annum. In case of availing income tax exemption under 80C, out of Rs 4.5 lakh, Rs 1.5 lakh will be further reduced, thus saving you the tax liability on income of only Rs 3 lakh. Under 80C, you can get the facility of income tax exemption on any investment made for more than five years.
NPS Deduction (Rs 50,000)
If you have invested under the National Pension Scheme, you can get an additional income tax deduction of Rs 50,000 under 80CCD (1B). That is, after deducting 50 thousand rupees from the income of three lakh rupees, you will be liable to tax on 2.5 lakh rupees only.
Home Loan Rebate (Rs 2 lakh)
If you have taken a home loan, then this can prove to be the most important link in saving income tax. You can get tax relief of up to Rs 2 lakh on home loan interest. In this way two lakh rupees will be reduced in 2.5 lakh rupees and you will have to pay income tax on 50 thousand rupees only.
Health insurance can also save tax (75 thousand rupees)
If your income is Rs 10 lakh per annum and you are able to save tax on Rs 9.5 lakh by fulfilling all the above-mentioned qualifications then you have almost won the battle to save tax. But, here is also a good news, you can avoid paying tax on the remaining 50 thousand rupees also if you have taken health insurance. Those taking health insurance also get a deduction of up to Rs 75,000 in income tax.
If you have got health insurance for yourself and your family members, then you can get tax exemption on the premium of Rs 25000 per annum. If you have got health insurance for your parents too, then you can also get an additional discount of up to Rs 50,000. In such a situation, fulfilling all the above-mentioned conditions, even if you have an income of ten rupees, you can avoid paying income tax even a single rupee.
