Income Tax Saving - 3 Popular Ways to Save Tax in India

As per the IT Act , there are several deductions which you can claim while filing your tax returns . These deductions can considerably reduce your total tax liability, allowing you to retain a higher percentage of your earnings. However, to take advantage of these deductions, you need to plan your taxes in advance,With these deductions in place, the tax rate as per your income slab would only be applicable on the balance income. So, what are the popular income tax saving options?

To encourage people to save, the government has allowed many investment options to be eligible for tax deductions under Section 80C, 80CCC, and 80CCD. The maximum combined deduction under these sections is up to Rs. 1.5 lakhs in a financial year.Some investment options under these sections are pension plans, PPF accounts , NSC , EPF, 5-year FD , and life insurance policy. If you are looking for income tax saving tips , investments in these instruments can help you save up to Rs. 1.5 lakh in taxes.

You can also claim tax deduction under 80D, 80DD, and 80DDB by purchasing health insurance for yourself and even your family members. The maximum deduction amount allowed is different for each of the sections, type of health insurance you have purchased, and the person insured.For instance, under Section 80D , if the insurance is purchased for yourself, your spouse or dependent children, the deduction limit is Rs. 25,000. If the insurance is for a senior parent, the income tax saving can be up to Rs. 30,000.

Taking a home loan is also a highly effective way to reduce your tax burden. Under Section 80C, the home loan repayment is eligible for tax deductions for up to Rs. 1.5 lakhs. Under Section 24, you can claim a deduction on the interest paid on the home loan up to Rs. 2 lakhs in some cases. Similarly, for Education loan, the interest paid qualifies for tax deduction under section 80E.With regards to home loans, another income tax saving section is Section 80EE which can help a taxpayer claim an additional tax deduction of up to Rs. 50,000 on home loan interest payment.
Other Important SectionsApart from the ones discussed above, you should also check sections like 80G, 80GG, 80GGA, 80GGB, and 80TTA to further reduce your tax liability.As you can see, there are quite a few income tax saving schemes that you can take advantage of to save taxes. Plan your taxes smartly and seek professional help if required to reduce your tax burden and save more of your hard-earned money.Ready to make the most of your money? Start your tax planning journey now!

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.