The amazing ways in which you can save tax legally
After the budget has been released a large number of people are wondering whether they shall be able to save any amount of money or not after clearing the different taxes implied on them. This article is going to offer certain tricks and tips that will be really effective in saving a considerable amount from the tax burdens. Check out the following tips to know the ways in which you can save your hard earned money.
- Remember that your taxable income is not the same as your income
We know that your employer are all aware about your complete salary and calculates the tax deduction according to that. But you can easily disclose details for any other taxable incomes like bank interests. This shall not be included while the calculation of your income and a certain amount of money shall be saved. Also you can opt for the tax benefits like tax exemptions within HRA.
- Use tax benefits for boosting your salary
It does not matter if it is your first job or the last, but the income tax that is deducted from monthly salary definitely hurts. Now, you can make use of the CTC components and different tax breaks. We know that everyone wants to live in their own house, but remember that if you have to make rental payment, then it shall offer you the “House rent Allowance” which is extremely beneficial in saving a good amount. Apart from that, you can also opt for the travelling allowances, education allowances and transport allowances.
- Make your savings work
To make the most of your savings, opt for the tax breaks. Within section 80C, there is a limitation of Rs 1.5 Lakh for investments. The New Pension Scheme is also a good choice in the present market which offers a good amount and monthly pension. This is going to be a fixed income for your future. A tax free interest is available if you can make a certain contribution to PPF.
- The home advantages
Home loan is the best option if you have a long time of work ahead of you. With the longer loan tenure, you shall have lower monthly EMI, but on a higher interest outgo. A deduction on housing loan shall be available within section 80EE. It is cheaper to book apartments which are still under construction and the total interest during pre0delivery is deducted within five installments.
- Group medical insurance
It is a fact that with the increase in hospitalization cost, you shall definitely need a medical insurance policy which would cover your family needs. The premium that is being paid by your employer for you and your family is completely tax free. And if you make a claim within this policy cover, the money that will be received is also tax free.
A tabular view of different tips to save money
|1.||The taxable income is not same as your income||Disclose the bank interests which shall not be included within your income calculation. This will save you a good amount of money.
|2.||Tax benefits||The CTC components can be used and other allowances like House rent, educational and travelling allowances are good ways for saving taxes.|
|3.||Make savings||Check the new pension schemes; look for the contribution on PPF which offers a tax free interest of 8.7%.|
|4.||Home loan advantages||With longer tenure you shall have a lower EMI, on higher interest outgo. Also deductions are available on housing loans.|
|5.||Group Medical insurance||Opt for the medical insurance policies that cover family needs. Premiums paid by your employer shall save you a lot of money.|