According to the Tax Act 1961, saving income tax In India if an individual’s annual income is quite 2.5 lakh rupees, then he will need to pay tax on this extra income. But, if you invest within the medium prescribed under the Tax Act, then it can help in reducing your liabilities.
The Income Department gives you tax relief on many investment options. Let’s know during which section of the tax Law are you able to get relief in tax by investing in it.
Tax deduction under section 80C – Saving income tax
You get an exemption under Section 80C of the tax Act on many options associated with Social Security schemes or investments.
These include your contribution to EPF, PPF, Sukanya Samriddhi Yojana, NSC, Tax Saving open-end fund (ELSS) and Tax Saving FD etc. you’ll avail tax exemption under section 80C on the savings made through these investment options.
Section 80 ccd (2d)
In the National Pension System (NPS), up to 10% of basic salary investment under Section 80CCD (2D), you get the advantage of tax exemption aside from Section 80C. Interestingly, this exemption on investment are often available to all or any taxpayers falling within the tax slab.
If you’ve taken a loan from the bank to create a house, then you get relief in tax under Section 24B of the Tax Act on the interest of up to 2 lakh rupees within the monthly installment purchased it.
Similarly, you get an exemption in tax on loans up to 30 thousand rupees for home repair etc.
You can also get tax exemption under section 80D on the quantity of premium paid to shop for insurance for yourself, husband, wife, children and fogeys or guardians.
Under this section, you’ll get a tax rebate on the quantity of premium purchased insurance of yourself, spouse and youngsters. there’s a premium of up to Rs 25,000 under the tax exemption. saving income tax In India
Apart from this, you’ll get a tax rebate on the premium of Rs 25,000 for your parents by purchasing insurance .
If your parents are senior citizens, then you’ll get a tax rebate for them at a premium of Rs 30,000 for insurance . Accordingly, by taking insurance for yourself and older parents, you’ll save tax on a premium of up to Rs 55,000.
Dependent health expenditure
Apart from section 80D, there are two more sections within the tax law, which you’ll cash in of health related expenses. Section 80DD deals with medical expenses for a disabled person hooked in to you. If the dependent is 40% disabled, medical expenses up to Rs 75,000 are often covered for tax savings.
If you’re quite 40% disabled, then you’ll get tax rebate under this section. Section 80U and section 80DD can’t be availed simultaneously. The advantage of tax exemption is analogous thereto of section 80DD.
If you’ve got taken an education loan for yourself, your spouse, your child, then you’ll get a rebate on the interest amount thereon under section 80E.
This amount are often up to any limit and may be taken for study anywhere within the country / abroad. The condition for getting exemption is that the loan has been taken for full time for education and brought from any financial organization or charitable institution.
Donating also can reduce your liability. you’ll get a tax rebate on 100% of the quantity by donating several funds from the govt .
Interest earned from a deposit during a checking account or post office, you’ve got to point out the income from other sources within the return. If your interest is a smaller amount than Rs 10,000 in anybody fiscal year, then you’ll get tax exemption thereon under this section.