Do you have a hard time in figuring out how to save tax? The thing to remember here is that tax
saving is not hard to accomplish endeavor as compared to what we think. You should just need to
learn certain things that will you reap the benefits from tax savings. Further, it is crucial to declare
details about investments at the beginning of the year to your employer, in such a way that he will
accordingly deduct the Tax Deducted at Source or TDS and will help you get the tax benefits in
advance as against waiting for the refund from the Income Tax Department. Let us explore different
ways to save on your income tax:
Consider a home loan:
It is true that some breadwinners will feel paying EMIs for home loans as a financial burden. But, the
good thing about this credit is that it will help you save a huge on tax. Yes, you can claim the interest
on home loan paid up to Rs.2 lakhs as tax exemption. Even, if you make any pre-payment for the
home loan, you can request the pre-paid principal of nearly Rs.1,50,000 as a deduction.
How about a HUF Account?
Even, if you make any additional income in addition to your salary, it becomes taxable. Nevertheless,
if you open a Hindu Undivided Family amount and show the other income under HUF, you can claim
exemption from the tax.
Payment of tuition fee:
Breadwinners pay a hefty amount of income towards the education of their children. If you have two
kids, you can claim a tax rebate for the amount that you spend as tuition fee for the schooling of
LTA or Leave Travel Allowance:
Some employers give LTA to the employees to meet the expenses of travel within the country. You
can claim this money as a deduction from your overall taxable income. It is a good idea to propose
your trips in advance, to get the LTA benefits
Health insurance and medical expenses:
You can claim a tax benefits of maximum Rs.15000 for children, spouse, and self and Rs.20,000 for
parents above 65 years of age. Also, you can also request maximum Rs.15,000 every year for medical
expenses by showing genuine medical bills and doctor consultation slips.
The fortunate thing about Income Tax Law is that it provides you with the chance to bring down the
taxes if you invest in pension funds. So, you can consider investing in pension funds, and you can get
help from a tax advisor in this respect.
Repayment of education loan:
You now know that there is tax rebate available on tuition fee that you pay for your kids. In the same
way, you can claim a deduction for EMIs that you pay towards your educational loan. It means that
investing in your education is more beneficial than just improving your skillset.
Employee provident fund:
Not just the interest, income and maturity amount of the Employee Provident Fund, but also the
contribution that you make to your PF Account is also exempted from income tax. So, you can
reduce the amount that you contribute to your PF account from your total taxable income.
National pension scheme:
National Pension Scheme is shortly called NPS. It is one of the most secure investment options
offered by the postal department in India. You can claim the amount that you contribute to this
scheme as a deduction on your taxable income.
Donations to charities:
You know contributions to aid organizations will bring you inner peace and satisfaction. But, it will
also bring you tax savings. So, if you look for ways to reduce your taxable income, donate to a charity
and gain satisfaction and also tax savings.
So, consider these ideas as you look for ways to save on the income tax. In India, there are different
sections under which you can claim tax deductions.