Income Tax, the two words that make every salaried individual groan. Every year, when the filing season rolls in, people start scrambling to find good ways to make sure that they pay lesser taxes. With just a few informed decisions on your part, Tax Saving can be a breeze.
The government isn’t as heartless about income tax as most taxpayers might think. It has made sure that there are plenty of ways for a salaried individual to save his/her hard earned money. Under Section 80 of the Income Tax Act of 1961, there are quite a few ways for you to save taxes.
We have listed out the few of most popular Tax Saving Avenues:
Equity Linked Saving Scheme (ELSS): These funds are known for their higher growth potential of investment and a short lock-in period of 3 years.
Fixed Deposit (FD): It lists as one of the most secure investments you can make since the returns aren’t tied to the market and therefore assured to grow your wealth.
Public Provident Fund (PPF): With PPF you can start the investment as low as Rs 500 and as high as Rs 1.5 lakhs. However, it has a rather long lock-in period of 15 years.
National Pension Scheme (NPS): NPS is a government-run initiative to encourage people to start saving up for their retirement.
Health insurance: A deduction of Rs. 25,000 can be claimed for the health insurance you’ve taken out for yourself, your spouse and dependent children. Additional deductions can be availed if policies are taken on behalf of parents.
Life Insurance: Deduction under Section 80C is available in respect of life insurance premium paid to any insurer approved by the Insurance Regulatory and Development Authority of India
Home loan – principal: This is another gem under Section 80C, the principal amount paid for a home loan by a first-time homeowner is deductible from their taxable salary.
Home Loan Interest: Section 80EE allows tax benefits for first time home buyers. Income tax deduction can be claimed on home loan interest.
House Rent Allowance (HRA): Under Section 80GG you can claim deductions if you do not receive HRA from your employer and make payments towards rent for any accommodation occupied by you.
Donations: Section 80G permits you to deduct any contribution you make towards charitable donations specified under it.
These are just a few of the popular options under Section 80C through which you can cut down on your payable Income Tax. Not only can you save on your taxes, but these investment options can also grow your wealth. So stay woke!