If Tax Planning is done properly, a lot of income tax can be saved. If you want to save tax in the next financial year, then it would be okay to make a plan now. From April 2022 to March 2023, some special instruments can be easily saved by investing. There are only a few days left for April to start. In such a situation, this is the best time for tax saving planning. We are telling you about the easiest methods of tax saving.
Along with saving tax, section 80C is also helpful in saving
Income tax is the easiest way to save tax, investment in instruments under section 80C of 1961. Under this section, some expenses are also allowed to claim tax deduction. Children’s tuition fees are an example of this. So if your children go to school or college, then you can avail tax exemption on tuition fees. This discount is only for two children.
What does it come in the radius of section 80C?
Section 80C includes PPF, equity mutual funds, 5 -year tax savings fixed deposits, life insurance and pension plans. It is easiest to fully use section 80C to save tax. Under this section, deductions up to Rs 1.50 lakh are allowed annually. This means that if your total salary is Rs 10 lakh annually, then it will be reduced by Rs 1.5 lakh for tax calculation.
The best thing is that section 80C also helps in saving you well. You can take advantage of tax exemption by investing in the tax scheme of mutual funds. Sip’s path will be best for you. In this, every month a fixed amount will go from your savings account to SIP. In the long term it is very helpful in raising good wealth. The tax saving scheme of mutual funds is called ELSS. Generally, the average return of this category schemes is more than 10 per cent annually.
Life insurance premium is also tax deduction under 80C. If you have taken a life insurance policy, then you can avail tax exemption on its premium. If you have not yet taken a life insurance policy, then you should soon take a policy with enough life cover. The younger the life insurance policy is taken at the age, the less its premium.
Help gets help in saving tax due to being component in salary
Many companies facilitate transport allowance, telephone allowance, food coupons etc. to their implies for tax saving. Actually, it is part of your salary package. However, these allowances do not come under tax. Due to this, your total taxable salary decreases. So you must see your salary structure once. If it does not include such allowances in it, then you can talk to HR about this.
Tax deduction allowed on HRA
Companies also provide house rent allowance (HRA) to their employees. You have to check once whether your salary includes it or not. If this component is not included then you can talk to your HR about including it. Tax deduction on HRA can be claimed. This reduces your total taxable amount.
Nowadays many people like to do charity. They contribute some part of their income for philanthropy. If you are interested in charity, do not forget to claim tax exemption on it. Under Section 80G of Income Tax, you can get 10 % of your income by charity and get deduction on it.
