Are you tired of paying big taxes every year? Do you feel like most of your annual income is heading towards the government? If yes, you are definitely craving for reliable income tax saving tips. Income tax can be a daunting experience, especially if you are paying a huge amount of money every year. Yet, it is not impossible to save some bucks from this stringent process.
Here are a few methods you can rely on, for saving more from your income tax.
RELATED POST: WHAT YOU NEED TO KNOW ABOUT TAX LIENS
#1 Make Investments
First things first, you should invest your income in the right channel. Not all platforms will help you save on income tax. However, there are few channels to ensure that your monthly income is saved as much as possible. In India, you have two interesting sections for saving on income tax. One would be 80C, and the other is 80 CC. These sections will help you save as much as 150,000 Indian Rupees every year. Common tools that fall under 80C are Employee provident fund, Tax Saving fixed deposit, senior citizen saving scheme, equity-linked saving scheme, public provident fund, and national saving certificate.
Your donations can have a positive impact on your taxes. The government has always supported sensible donations. If you are willing to make a donation for the poor and needy – you can claim this amount as tax-free. Of course, you must make the donations to NGOs that are recognized by the government. In some cases, funding political parties will also be tax-free under Section 80G. Well known places that encourage donations and are tax-free would be the National Fund for Control of Drug Abuse, Clean Ganga Fund, and Swachh Bharat Kosh.
#3 Home Loans
The talk about income tax saving tips will be incomplete without home loans. You will be able to save on both the interest and principal payment. For most families, this is a big tax saver. According to present rules, a deductible amount of 200,000 Indian Rupees is offered on the interest. And, a similar amount is quoted on the principle. This means you will be able to save taxes on both the principal and interest separately. Of course, the make the most from this, you should have a hefty home loan!
ALSO READ: HOW TO BECOME MORE FINANCIALLY SECURE
#4 Account Personal Expenses
Finally, you can quote personal expenses to save on taxes. This includes tuition fees, insurance premiums and medical treatments for certain diseases.