New Delhi: Taxes are imposed in India on property, wealth, and income. Be it individual income or corporate revenue, both are subjected to taxes as per government laws. The net worth of assets that people or businesses own is also subject to the wealth tax.
Opportunities to save taxes and lower their overall tax liability are always welcomed by income taxpayers. Under the Income Tax Act, there are many legal methods to reduce your taxes.
Here are ten practical tips for taxpayers to consider:
Deductions Under Section 80C, 80CCC, And 80CCD:
Citizens can claim deductions by investing in specified instruments, providing an opportunity to save up to Rs 1.5 lakh.
Medical Expenses (Section 80D):
Salaried employees can avail of tax deductions on medical insurance, covering spouses, dependent children, and senior citizen parents, allowing claims up to Rs. 50,000.
Home Loan (Section 24):
Taxpayers with home loans can claim deductions on the interest payable, with a limit of Rs. 2 lakh, and no upper cap if the property is rented out.
Education Loan (Section 80E):
Individuals can save on tax by opting for education loans, with no maximum limit on the deduction for interest payments.
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Shares and Mutual Funds (Section 80CCG):
Citizens earning below Rs. 12 lakhs annually can enjoy additional deductions by investing in specified shares and mutual funds under the Rajiv Gandhi Equity Savings Scheme.
Long Term Capital Gains:
Taxpayers can reduce tax liability by reinvesting the gains from the sale of long-term assets in specific instruments.Sale of Equity Shares:
The government encourages investment in equity shares and mutual funds by exempting tax on long-term gains, provided the shares are held for more than one year.
Donations (Section 80G and 80GGC):
Taxpayers contributing to social causes or political parties can claim deductions up to 50 percent of the donated amount and 10 percent of adjusted total income, provided the NGOs or political parties issue relevant certificates.
House Rent Allowance (Section 80GG):
Employees can claim House Rent Allowance (HRA) under Section 80GG, providing relief on taxes if the annual rent exceeds Rs. 1 lakh. Necessary documents, including the landlord’s PAN card and lease agreement, must be submitted.Leave Travel Allowance (LTA):
Read More: Government makes crucial changes in income tax return forms
Individuals receiving LTA from employers can claim tax-free LTA by traveling within India during leave periods, applicable twice in four years, and covering trips with spouses, children, and parents.
