Running with the house rent receipts and credit card bills at the brink moment can make it tedious to file tax savings. Here are some of the tips this article articulates to help benefit through the tax savings and filings. It is that time of the year of the tax headache prolongs and we have no clue how to file one wisely.
Pay health insurance premiums
The government can reduce the tax up to Rs.25000/- for health insurance under Section 80D. Over a period of time, for senior citizens, this limit is increased to Rs 50,000.
A person contributing health insurance for himself and senior citizen parents can avail of the combined deduction up to Rs 75,000 per annum.
Get a deduction on paying rent
An individual can claim a tax deduction on the House Rent Allowance (HRA) if you get HRA. There is no upper limit for this but there are a set of rules that cap the maximum HRA deduction.
If the individual doesn’t have HRA policy, he/she can claim a deduction under Section 80GG up to Rs 60,000 per annum.
Get deduction on interest on a home loan
Under section 24 of the income tax, home loan interest has an option of deducting the tax to up to Rs. 2 lakhs per annum.
Savings can reduce tax
A savings account is the easiest option to reduce the tax that an individual claim.
Interest on savings accounts is tax-free up to Rs 10,000 per year under Section 80TTA. And the limit extends up to Rs. 50,000 for senior citizens under the same section for both FD & savings account.
The charity helps reduce your tax
There is no particular limit to tax deduction under charity, but it helps a lot in doing so. The tax deduction depends only on the range of charitable contributions.
For most of the NGOs that take free donations should have necessary 80G certificate for us to claim a 50% deduction from the tax on our charity. Moreover, the tax is reducible up to 10% of the total income in this case.
Work on the National Pension System
Make use of the Section 80CCD (1B) for tax deduction up to 50,000, wherein the person has contributed to NPS.
The pro-active planning will help us assert the amount in different equity and debt pension funds.
Clear Rs. 1.5 Lakh limit under Section 80C
This group covers the national income and pension with fixed deposits. Public provident fund is something that the government brought in a picture to establish savings scheme over a tenure of 15 years.
The best part of this fund is the interest is absolutely tax-free.