Tax Saving Tips 2024: Now that it is the season of tax planning, we thought why not prepare a complete guide for you on where you can save tax in the new year. In this guide you will find 20 such methods which will become ‘tax savior’ for you.
Tax Saving Tips 2024: With the new year, the time for tax planning has also started. It is important for you to do complete planning of tax savings before 31st March. There are many such provisions under the Income Tax Act, 1961 in the country, under which you can save tax through your expenses and savings. There are many such sections, through which you get tax deduction on various income and investments from the government (tax deduction in 2024). You may know many of these things and may already be taking advantage of some of them. But now that it is the season of tax planning, we thought why not prepare a complete guide for you on where you can save tax in the new year. In this guide you will find 20 such methods which will become ‘tax savior’ for you.
Two ways to save tax (tax saving options)
See, there are two ways to save tax – one is by investing money in tax exempt investment vehicles, second is by making such deductions from your salary on which the government gives you tax exemption. That means you can save tax by investing and showing deductions on your salary.
20 ways to save tax
1. Rebate on home loan
Under Section 80C of Income Tax, you can get exemption of up to Rs 1.5 lakh on the principal amount of home loan and up to Rs 2 lakh on the interest paid under Section 24.
2. Education Loan
Under Section 80E of the Income Tax Act, you can claim deduction on the interest paid on education loan.
3. Education Scholarship
Under Section 10(16) of the Income Tax Act, scholarship received by any student is tax free.
4. Income from farming
If you are earning from farming, then you will not have to pay any tax on it. In India, farmers do not have to pay any tax on their farming income. According to the Income Tax Act, 1961, income from agriculture is exempt from tax. Farmers are thus not required to file any return of their income.
5. Interest on savings account
The money that comes from interest in your bank’s savings account is also subject to tax, but an annual exemption of Rs 10,000 is available on all your savings accounts combined. Senior citizens get a rebate of up to Rs 50,000 under Section 80TTB.
6. Money received from equity mutual fund
The profit you make by holding equity funds or shares for more than a year is considered as long term capital gain. If it is up to Rs 1 lakh or below, then you do not have to pay any tax on it.
7. Inherited property
Property received by the proper heir through inheritance or will is tax free in India.
8. Wedding gifts
Gifts given to the bride and groom at weddings have been kept out of the scope of income tax, however, this rule will apply only to gifts up to Rs 50,000. On gifts of value above this, money will be deducted as per your tax slab.
9. NRE Account
Indian citizens living outside India have NRE accounts, they earn interest on both accumulating and fixed deposits. The interest received on this is tax free.
10. Hindu Undivided Family (HUF) and Additional Income
Under the Income Tax Act, separate tax exemption is available under the category of Hindu Undivided Family. In this, all the members get separate exemption, and a basic tax exemption of Rs 2.5 lakh is also available.
11. Exemption under 80C
If you invest in schemes covered under 80C, then you can avail exemption of up to Rs 1.5 lakh.
12. NPS
By investing in NPS i.e. National Pension System, you get benefit under 80C, but on investing in it you get an additional benefit of Rs 50,000.
13. Provident Funds
Exemption can also be claimed on the amount deducted from the Public Provident Fund, a scheme run by EPFO, or from the salaries of salaried professionals for EPF i.e. Employee Provident Fund.
14. Money received from life insurance policy
Under Section 10(10)D, tax will have to be paid on insurance policies (except ULIP) issued on or after April 1, 2023, only if the annual premium on it is above Rs 5 lakh.
15. Health Insurance Premium
If you have taken a health insurance policy for yourself and are paying the premium, then you can avail a discount of up to Rs 25,000. On top of this, you can also avail discount on the premium of the policy taken in the name of your spouse and children. If the age of your parents is below 60 years, then you can avail a maximum rebate of Rs 50,000 on the premium if it is Rs 25,000 and above.
16. Exemption in expenses on treatment of disabled family members
Under Section 80DD, you also have the provision of tax exemption on the expenses incurred on the treatment of any disabled person in your family. Upper limit condition for deduction – There is an exemption of Rs 75,000 from the gross income for 40 per cent disability or Rs 1,25,000 from the total income for 80 per cent or above disability.
17. Exemption on the cost of treatment of specific diseases
Under Section 80DDB, there is exemption on the expenses incurred by any individual or HUF for the treatment of a particular disease.
18. Discount on donations
Under Section 80G, you get exemption on donating to special relief funds and charitable organizations. However, not every type of donation is eligible for tax exemption.
19. Donation to political parties
Under Section 80GGC, there is an exemption that donations or donations given to political parties should be kept out of the purview of tax. There is no limit on donation in this.
20. Discount for businessmen
If you run your own business, you can claim tax deduction on travel expenses.
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