Entering into a professional life is itself a boon. You can spend accordingly, don’t have to ask for money from parents, have financial freedom, etc. But then, at the same time, a major responsibility also comes on your shoulder and this is payment of taxes on time. Obviously, you can’t ignore it, but you can avoid paying a higher amount.
Yes, it’s true. Today, the government has come up with many attractive schemes, investing in which saves you from paying higher taxes. It allows you to enjoy lots of exemptions as well as reduces your tax-liabilities too. So, if your annual income is less than 10 lakh, here are some investments tricks with which you can save your taxes:
Investment in Health Insurance
As said Health is wealth. So, if you are investing in health insurance, you will not save money for you healthier future, on the other hand, a premium paid on it also helps in tax exemptions under Section 80D of the Income Tax Act.
The premium paid by an individual on health insurance helps in saving Rs 25000 a year. On the other hand, if your parents are dependent, then you can claim additional 25,000. In case, parents are senior citizens then the claim increases to 30,000. So, the total exemption is Rs 55,000 on a yearly basis.
Rebate under Section 87A
This may not be known to many taxpayers. Under Section 87A of the income tax act, you can enjoy a rebate of 2500. Do remember, to enjoy this rebate your income must be less than or equal to 3 lakh 50 thousand after all the deduction under section 80C.
Home Loan Benefits
If you have taken a home loan, then also you can avail exemption under section 24 of the Income Tax Act. In this case, the property must be used for residential purpose. You can avail a maximum exemption of 2 lakh a year.
Also, a first-time taxpayer can avail additional benefit on the loan interest under section 80EE of the IT Act. A maximum of 50,000 can be claimed on a yearly basis. So, clubbing both the deduction, a total of 2 lakh 50 thousand can be claimed yearly.
Exemptions under Section 80C
If you want to enjoy some more exemptions, here is one of the best options. Do a lot of investments where you can get rebate under Section 80C. These investments include premiums paid towards Life Insurance, Home loan Principal amount, investments made towards PPF, NSC, ELSS, NSC, Fixed Deposit, post office saving scheme, and senior citizens savings scheme.
Donations to Charitable Organisations
Apart from all of the above, you can also enjoy tax exemptions under section 80G of the IT act if you have made any donations in relief fund or charitable organisations. Especially in case of donations to relief funds, you can claim 100% amount with or without any upper limit.