A clever tax-planning approach may accomplish the twin purposes of assisting people in reaching their financial objectives and reducing their tax liability.
80C Section
It allows you to deduct expenses from various assets up to Rs. 1.5 lakh every fiscal year.
Section 80C exempts from tax any interest paid or credited on money borrowed for lending to an individual in India to promote savings and investments.
Additionally, under this clause, 10% of the total interest due under section 8 of the Income Tax Act of 1961 is deducted at source.
The circumstances under which interest may be deducted at source are outlined in Section 80 of the Act above.
After meeting these requirements, you can get up to a 10% deduction. You can deduct interest paid at source on loans made to borrowers who are residents of India.
The Public Provident Fund
The Public Provident Fund is a 15-year government savings plan with a lengthy duration.
In most Indian banks and post offices, there is an accessible standard income tax savings plan. Every quarter, its rates are adjusted.
The circular states that the current PPF interest rate is 7.1%.
PPF interest is not subject to taxes. Consequently, the minimum amount needed to create a PPF account is Rs. 500, and the highest amount that may be invested in a single financial year is Rs. 1.5 lakh.
Certificate of National Savings
Another vital income tax savings program is the National Savings Certificate, which has a 5-year term and a set interest rate of 7.7% annually.
Interest in NSC is considered a tax-saving alternative, and section 80C allows for a refund of up to Rs 1.5 lakh.
NPS
Due to the minimal fund administration fees, it is economical. The fund managers oversee the assets in three different accounts: G Government securities (G), Corporate bonds (C), and Equity (E).
Each account has a diverse asset profile. NPS benefits those trying to save money for retirement with different risk tolerances because of the variety of available alternatives.
Yojana Sukanya Samriddhi
The SSY program is available to all such parents with a female child under ten. Furthermore, contributions made to this program qualify for a tax deduction of up to Rs. 1.5 lakhs under Section 80C. The interest generated under this program is tax-free, and the current interest rate is 8.00%.
Fund for Employee Providence
A retirement benefits program called EPF is specifically for salaried workers.
Employers are required by the EPF Act to withhold 12% of base pay and Dearness Allowance (DA).
After that, the money is placed into provident fund plans approved by the government. This is a standard tax saving plan where the deduction is applied to the Section 80C limit of Rs 1.5 lakh.
Repayment of Home Loan
If you have a house loan, you may deduct a portion of your EMI from your taxes under Section 80C to pay down the principal. However, tax deductions are not available for the amount paid in interest.
Fees For Tuition
Only individual parents or guardians with a maximum of two children per person are eligible for this income tax savings advantage.
You may claim tax deductions on tuition costs paid for your child's education up to a maximum of Rs. 1.5 lakh.
Additionally, the child's class has no bearing on this reduction. However, the youngster must be enrolled full-time in an Indian school, college, or university for the educational course.
Parents who are divorced, single, or have adopted children are eligible to apply for and receive benefits from this system.
Conclusion
Additionally, the government grants residents and non-resident persons and institutions several tax perks.
Therefore, using all your alternatives rather than whining about them is preferable. You may save much money on taxes in India if you know your rights.
In India, you may need to save taxes. There is a saving tax on capital gains and mortgage interest.
However, maintaining a tax requires time and work on the taxpayer's part.
Read more: https://www.starsuntold.com/a-thorough-guide-to-self-assessment-and-tax-return
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