Are you one of those people, who works for 9 hours in a day to earn a living? One thing that could be troubling you is the amount of taxes you have to pay to the government from your hard- earned income. You may be salaried individual or a business owner, paying taxes is mandatory for every income earner in this country. But, what would you do if half of your money is getting deducted in the form of taxes? Don’t worry, we have scribbled down a few easy tax saving strategies for you.
- Make a Donation: Any philanthropic act done by you in the form of donations is rewarded by the government of India. Donations one makes towards any charitable cause to various trusts and approved charitable institutions are exempt from tax under Section 80G of the Income Tax Act. Such Step is taken by the government to encourage kind act of donation among people.
- Invest in ELSS Mutual funds: Equity-linked saving mutual funds invests in stocks of equity markets and ensure a higher return over a specific period of time. There is a lock-in period of 3 years for investing in such funds. The best part about investing in ELSS funds is that all returns are tax-free. Such investments would bring you double advantage of profitable returns as well as tax saving.
- Save through home loan: Buying a house with a loan comes with various tax benefits. You can avail deduction on the EMI amount that is paid towards principal under 80C of income tax act. A maximum of Rs 1.5 lakh can be claimed as a deduction under this section. Even interest paid on EMI’s can be claimed as deduction under some circumstances.
- Insurance policies: Life insurance and Health insurance policies, Along with protection against losses and damages against uncertainties of life also provides benefits of tax savings. Premium paid for life insurance policy is deductible under section 80Cof income tax act. You can claim a deduction of Rs 1lakh maximum. While, if you own a health insurance or a mediclaim policy, maximum deduction allowed is Rs 15000 under section 80 D of income tax act.
You can check Aegon life policy premiums for further tax benefits.
- Other elements that avail tax benefit.
- Tuition fees for up to 2 children is deductible.
- Investment is fixed deposits.
- The amount contributed to Employee provident fund is also tax deductible.
The above strategies regarding tax planning will help you save a lot of your income as well as it will multiply your wealth in some cases.