Super Idea to Save Tax: If we all want to save tax, then we can invest in tax-saving schemes like Public Provident Fund (PPF), National Pension System (NPS), National Savings Certificate (NSC), tax-saving FD, life and health insurance policies.
Savings invest in financial options, but apart from these there are some other options which can help us reduce our tax outgo without any investment.
So, if you do not want to make any additional investment, you can use these options to save tax.
Take a home loan
Taking a housing loan is the best way to save tax. It offers several deductions. Generally, you will get a deduction of up to Rs 1.5 lakh on home loan principal repayment under section 80C and up to Rs 2 lakh on interest repayment under section 24B.
Under 80C, you have the option of pre-paying the principal amount and earning a deduction of up to Rs 1.5 lakh and thus avoid buying more tax savers.
Depending on the property you bought, the amount you borrowed and the year of your loan sanction, you may be eligible for an additional tax deduction of Rs 50,000 under Section 80EE or Rs 1.5 lakh under Section 80EEA on your loan interest repayment Are.
Medical expense deduction
Section 80D allows you to claim deduction for premium paid for health insurance policies for self, spouse, dependent children and dependent parents.
You should definitely buy health insurance for everyone in your family, but even if you don’t, you can claim a deduction of up to Rs 5,000 for expenses incurred for preventive health check-ups.
In addition, a deduction of up to Rs 50,000 can also be earned on healthcare expenses incurred by you as a senior citizen or for your senior citizen parent, assuming the same is covered by the senior citizen health insurance. has not been done.
Deduction from children’s tuition fees
The expenditure on children’s education eats up a major part of our income. Therefore, it makes a lot of sense to maximize the tax benefits associated with these costs. Parents can claim a tax deduction of up to Rs 1.5 lakh under Section 80C for the tuition fees paid for the education of their children.
Note that this benefit is applicable to full-time education scheme provided in any registered institution such as schools, colleges and even pre-schools and nurseries. However, this is applicable for tuition fees paid for up to 2 children per taxpayer (i.e. a couple with two individual taxpayers can avail this benefit for up to 4 children).
Also, this benefit is applicable only on tuition fee and not on other payments like development fee, late payment fee etc. Further, if your employer provides Children’s Education Allowance and Hostel Expenses Allowance, you can avail tax exemption on such allowances up to Rs.1,200 and Rs.3,600 respectively. This is for a maximum of 2 children.
Increase your EPF contribution with VPF
Employees’ Provident Fund is the backbone of retirement savings for countless salaried individuals. While they need to save at least 12% of their basic pay and dearness allowance as EPF, they can go beyond this limit (up to 100% of their basic pay and DA) through the Voluntary Provident Fund Scheme. VPF, as the name suggests, is a voluntary contribution over and above the mandatory EPF contribution.
Save tax by paying rent
If you are a salaried individual and living in a rented house, you can save some tax by paying rent to the landlord. If you get House Rent Allowance (HRA) from your employer, you can claim exemption on the rent paid as per the provisions mentioned in section 10(13A) of the Income Tax Act. In the case of other individuals and in cases where no HRA is received by the employee, deduction up to Rs.5000 per annum for rent paid by the individual in respect of accommodation for his own residence as per section 80GG of the IT Act month (subject to prescribed conditions) deduction can be claimed.
