Tax-Saving for Young Earners Simplified

Jun 08, 2018 | 1 year ago | Read Time: 1 minute | By iKnowledge Team

 

Tax Savings Options

Tax saving is no rocket science. Here’s how you can master it.

 Knock the 80C door

  • Section 80C allows tax deduction up to Rs 1.5 lakh every year
  • It allows you to invest in order to save tax
  • Life insurance is one such tax-saving option

Get health insurance

  • Health insurance reduces your taxable income further
  • Paying premium for self gives you a Rs 25,000 tax benefit each year
  • Paying for parents gives you tax deduction of Rs 50,000 per annum

Look at pension schemes

  • Section 80CCD (1b) allows additional deduction of Rs 50,000 every year
  • You can look to invest in National Pension System (NPS)

Rent can fix tax dent

  • House Rent Allowance (HRA) can help reduce your taxes
  • You can claim HRA if living in a rented apartment
  • You can also pay rent to your parents to claim HRA

Eating it out 

  • Food coupons given by employer are partially exempt from taxes

Education to the rescue

  • The interest on education loan (for self or spouse) for higher studies is exempt from tax**

** For a maximum of 8 years

Advt. no: IA/May 2018/4045


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