How to Save Income Tax

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How to Save Income Tax

Overview : Best Way to save Income Tax in India

Paying income tax is a crucial duty for every citizen earning a taxable income. However, knowing how to save income tax legally can help you reduce your tax burden significantly. The Income Tax Act of India provides various tax-saving options for taxpayers. In this blog, we will discuss some of the most effective ways to save income tax and how Luxe Finalyzer can assist you in this process.

  1. Invest in Tax-Saving Instruments

Investing in tax-saving instruments like Public Provident Fund (PPF), National Pension System (NPS), Equity-Linked Savings Scheme (ELSS), and tax-saving fixed deposits can help you save tax. Under Section 80C of the Income Tax Act, you can claim a deduction of up to Rs. 1.5 lakh on your taxable income by investing in these instruments. Luxe Finalyzer can assist you in selecting the right tax-saving instruments based on your financial goals and risk appetite.

  1. Health Insurance

Purchasing health insurance can provide you with financial protection against medical emergencies and also help you save taxes. Under Section 80D of the Income Tax Act, you can claim a deduction of up to Rs. 25,000 on the premium paid for health insurance for yourself, your spouse, and dependent children. If you are a senior citizen, the deduction limit increases to Rs. 50,000. Luxe Finalyzer can help you choose the right health insurance plan that suits your needs and also qualifies for tax savings.

  1. Donations to Charity

Donating to charity can help you contribute to society and also save taxes. Under Section 80G of the Income Tax Act, you can claim a deduction of up to 50% or 100% of the amount donated, depending on the charity you donate to. Luxe Finalyzer can assist you in identifying the eligible charities and help you maximize your tax savings through donations.

  1. Home Loans

If you have taken a home loan, you can save taxes on both the principal and interest components of the loan. Under Section 80C, you can claim a deduction of up to Rs. 1.5 lakh on the principal amount, and under Section 24, you can claim a deduction of up to Rs. 2 lakh on the interest component. Luxe Finalyzer can assist you in understanding the tax implications of your home loan and help you plan your tax-saving investments accordingly.

  1. Rent Paid

If you are a salaried individual and live in a rented house, you can claim a deduction on the rent paid under Section 80GG of the Income Tax Act. The deduction amount is subject to certain conditions, such as not owning a house, not receiving HRA, and paying rent above 10% of your salary. Luxe Finalyzer can help you determine your eligibility for this deduction and assist you in claiming it.

Conclusion

Saving income tax is not about evading taxes but utilizing the provisions provided by the Income Tax Act to minimize the tax burden legally. Luxe Finalyzer can assist you in selecting the right tax-saving instruments, choosing the appropriate health insurance plan, identifying eligible charities, understanding the tax implications of your home loan, and claiming the rent deduction. By doing so, you can not only save taxes but also secure your financial future. Contact Luxe Finalyzer today to make the most of your tax-saving opportunities.

 

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