Income Tax Return Filing (Indicated Image)
A question revolves in everyone’s mind that what can be the easiest way to pay low income tax? If you pay tax then this question must arise. It is certain that if you come under the purview, you will have to pay tax because there is no way to avoid it. But it is also certain that if you wish, you can reduce the tax liability by some measures. This will happen only if you do proper planning. Tax saving will happen only when you pay attention to your spending and investments. There are many rules of income tax which help you to save tax. For this you have to plan in advance and then proceed accordingly.
Here are 7 ways to help you save tax-
1-Save for retirement
If you want to pay less tax, then plan it and start saving for retirement. There are many investments on which a discount of up to Rs 1.5 lakh can be taken. If you invest the entire amount in a tax saving scheme, then your taxable income can reduce by up to Rs 1.5 lakh. These tax saving investments include PPF, NPS, EPF, Tax Saving FDs. If money is deposited for retirement in these schemes, then up to Rs 1.5 lakh can be saved under section 80C.
2-Keep the medical bills of the parents
Abhishek Soni, co-founder and CEO, Tax2win.in, tells Financial Express, “Senior citizens should keep the medical bills of the parents handy and deposit the bill money in online mode. With this, a deduction of Rs 50,000 can be found under section 80D.
3-Keep the rent receipt for the benefit of HRA
If you live in a rented house, then take the rent receipt from the landlord and also keep the rent agreement along with it. This helps in claiming HRA and reduces the tax liability. If you pay rent more than Rs 1 lakh in a year, then you should also take the PAN number of the landlord. This information has to be given in the income tax return.
4-Get health insurance for yourself and family
To save tax, definitely take health insurance for yourself and family. In this, tax exemption can be claimed on the premium of health insurance. Deduction can be taken on premium of insurance under section 80C and 80D.
Invest in 5-Tax Saving Mutual Funds
Investing in Tax Saving Mutual Funds (ELSS) is considered a better way to save tax. Investing in this fund gives good returns, along with one can avail deduction of up to Rs 1.5 lakh under section 80C. However, tax exemption on investment in mutual funds can be availed only if 1.5 lakh deduction has not been availed under section 80C for any other investment. Deduction can be taken on investment under section 80C up to a maximum of 1.5 lakhs, not more than that.
Invest in 6-NPS
Investing in the National Pension System or NPS is considered the best way to save tax. A deduction of Rs 50,000 can be claimed on the money deposited in NPS with a deduction of 1.5 lakh in any other investment. This rule comes under section 80CCD(1B). This deduction of Rs 50,000 can be taken in addition to the deduction of 80C.
7-Deposit money in NPS from the company
To save tax, apart from depositing money in NPS itself, it is better to invest from the company as well. On behalf of the employee, the company can also deposit money in NPS if it wants. An additional 10% deduction can be taken on the deposited money of the company. Here 10% is of basic salary and DA.
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