Everyone likes to save their hard, earned money, including taxes. But taxes are important for the government to run this country. Don’t worry here we are not telling you to do some illegal work of saving your taxes. But in fact, there are multiple schemes by which you can save it legally.
March Month has started and everyone is looking for tax-saving options.
Today I am going to share with you about…
- who needs tax saving options and
- how to do Tax planning.
- How many Tax saving options are available.
Who needs Tax Saving Options?
If your income is say Rs 2,60,000 then there is no need for Tax planning.
Rs. 2,60,000 * 5% = 13,000/- This the Tax you will have to pay, that is not much and you can easily manage with a Health policy. But if your income is above Rs. 5 lakh you need to do good Tax planning.
How to do Tax Planning?
Section 80C of the Income Tax Act of India
Expenditure Deduction options u/s 80C
- Home loan repayment: If you have taken a home loan, the part of EMI that goes towards repaying the principal amount is eligible for tax deductions under Section 80C maximum deduction being Rs. 1,50,000 ( for each co-owner) . The amount you pay as interest does not qualify for tax deductions in this section. ( Rs.2,00,000 maximum deduction available u/s 24b for interest repayment.)
- Stamp Duty and Registration: If you have purchased a home, stamp duty, registration, and other expenses directly related to transfer are allowed u/s 80C. Maximum Rs. 1.5 Lakhs.
- Tuition fees: You can claim tax deductions up to ₹1.5 lakh on tuition fees paid for your child’s education. This benefit is only available to individual parents or guardians and a maximum of two children per individual
- Term Life insurance premium: If you have bought life insurance policies, the premium can allow you to avail of tax deductions under Section 80C. (max Rs. 1,50,000)
- Health insurance Premiums: This is u/s 80D. Paid to insure self, spouse, dependent children and any member of Hindu Undivided Family are eligible.
- Senior Citizen Savings Scheme: If you have already retired or applied for voluntary retirement, the Senior Citizens Savings Scheme can be an option as a risk-free tax-saving investment
How to save up to Rs. 78,000 every year.
If you count all and you think overall expenditure is around Rs. 1,50,000 or exceed then you don’t need any tax saving investment instrument at all. But if you still have space to reach Rs. 1,50,000 you can explore other Tax saving investment options.
Investment option u/s 80C
If your expenditure is under 1,50,000 then only you can consider these tax-saving investment options u/s 80C
Investment option u/s 80 CCD (1B)
- Section 80CCD (1b):
This subsection provides an additional deduction of ₹50,000 on investments in NPS. This is over and above the ₹1.5 lakh available under Section 80CCD(1). So, in short, you can avail of a total tax deduction of ₹2 lakh when you invest in NPS every year.
We at Tstock Mantra Investments by Amruta Tushar Ghone provide complete Financial Planning for an individual i.e., Mutual Funds, Insurance planning, Retirement planning, and so on.
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