5 BEST TAX SAVING TIPS IN INDIA
1. Tax Saving instruments â—? There are different ways to save taxes, but one should be careful in choosing a particular instrument as not all of them are same. â—? Different instruments serve different purposes, so choose those which would best satisfy your financial goals.
2. Section 80C ● Under this section, investment up to Rs1500000.00 is exempt from tax. Instruments covered in this section include Life Insurance Premium, ELSS, Provident Funds, National Savings Certificate, Children’s Tuition Fees, etc. ● Over and above this limit, investment of Rs50000.00 is allowed in National Pension Scheme.
3. Health Insurance â—? Family health is a matter of great importance. Modern lifestyle has made people vulnerable to many diseases. â—? Under section 80D, premium up Rs25000 for family health insurance, with additional Rs25000 for parents is exempt from income tax.
4. Home Loans â—? The Indian government has always encouraged people to buy their own home, and allows deductions for interest and principal repayment if you have bought a house through a home loan. â—? A maximum deduction Rs200000 can be claimed for interest payment under section 24 and Rs150000 for principal repayment under section 80C.
5. Capital Gains â—? Profit made by selling an asset such as, bonds, stock or real estate is called capital gain. Both are taxed at different rates. â—? However, you can substantially reduce you tax liability by investing in another house property or capital gains bonds under sections 54F and 54EC respectively.
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