Individuals can save a lot when it comes to Income Tax in India, if they plan their salary structure and
use the full benefits of the income tax exemptions that are granted in India. Here are
some ways in which salaried individuals can save income tax in India: 1)
Negotiate a correct salary structure To begin with when you take-up a job, make
sure you get the right salary structure in place. Your salary component, most
be planned in such away that perks are included and help you save tax
Click here to Download Income Tax Automated Form 16 Part B for Financial Year 2015-16 [ This Excel Utility can prepare
One by One Form 16 Part B]
Click here to Download Income Tax Automated Form 16 Part B for Financial Year 2015-16 [ This Excel Utility can prepare
One by One Form 16 Part B]
1) Use full benefits of Sec 80C You can save income tax in India by investing
in a host of instruments that offer you tax benefits under Sec 80C. These
include PPF, ULIPs, ELSS, Bank Saving Fixed Deposits etc. You can save a
maximum of Rs 1.5 lakhs per year The limit was enhanced from Rs 1 lakhs earlier
to Rs 1.5 lakhs.
2) House Rent And Tax Exemption The salary of every
individual most certainly includes an element of house rent allowance (HRA). If
you are staying in a rented apartment or house and paying rent, you can claim
tax deduction under Sec80GG of the Income Tax Act.
3) Saving income tax on home loans Home loans are a big way
to save income tax in India.
In fact, one can save a whopping amount of money through home loans. In the
Union Budget 2015-16, Finance Minister Arun Jaitley hiked the limit on
deduction on home loan interest under Section 24 to Rs 2 lakhs from Rs 1.5
lakhs earlier. The principal amount also was hiked to Rs 1.5 lakh from the
earlier limit of Rs 1 lakh.
Thus the total amount of savings is Rs 3.5 lakh per annum, which is a huge saving.
Thus the total amount of savings is Rs 3.5 lakh per annum, which is a huge saving.
4) Take a health insurance policy Individuals should take a
health insurance policy, which would enable them save tax up to Rs 25,000 in
case of ordinary citizens and Rs 30,000 in case of senior citizens. So, one can
go ahead and take a good health insurance policy.
5) Rajiv Gandhi Equity Saving Scheme This was a new
scheme launched two years ago. Under this scheme individuals can invest up to
Rs 50,000 in approved stocks. The tax benefits are available under Sec 80CG.
However, only first time investors are allowed to invest in this scheme to
claim tax benefits.
6) Tax savings under new pension scheme You can also claim income tax deduction in the New Pension Scheme, which was launched by Finance Minister Arun Jaitley in last year's Union Budget. NPS is a voluntary pension scheme, which is regulated by the Pension Fund Regulatory and Development Authority. Conclusion The amount of tax benefits that India offers is probably second to none. Individuals can claim tax benefits through proper planning and research. You should begin by ensuring a proper tax structure is in place, after which you can plan to save on taxes.
6) Tax savings under new pension scheme You can also claim income tax deduction in the New Pension Scheme, which was launched by Finance Minister Arun Jaitley in last year's Union Budget. NPS is a voluntary pension scheme, which is regulated by the Pension Fund Regulatory and Development Authority. Conclusion The amount of tax benefits that India offers is probably second to none. Individuals can claim tax benefits through proper planning and research. You should begin by ensuring a proper tax structure is in place, after which you can plan to save on taxes.