At Rs 10 lacs the income tax towards one person entails the payment of the income tax of Rs 1,17,000. However, if the planning is done effectively then one does not require to pay the income tax on your income of Rs 10 lakhs.
The government so as to surge the savings and furnish the tax has made exemptions beneath various heads for the advantage of the specific taxpayers. Rs 2.5 lakhs is the basic exemption limit as per the income tax act but through claiming distinct available exemptions the taxpayer might furnish zero tax up till the income of Rs 10 lakhs and in this way secures his hard-earned money. Despite the assistance of these deductions and the exemptions one would diminish his or her tax.
Income Tax Exemptions
Saving an income is not so tough but the basic knowledge of the income tax is needed. Now discussing what exemptions would be claimed so as to diminish the tax liability of a person.
Deduction Under Section 16(ia)
- If you count as a salaried person then you are enabled to take a deduction of Rs. 50,000 as ‘Standard Deduction’ u/s 16(ia) of the Income Tax Act.
Income Tax Section 80C
- Any person who would avail the exemptions under section 80C of the income tax act in which one is enabled to claim the maximum of Rs 1,50,000 via contributing to EPF, PPF, ELSS, NSC, and others or furnishing a LIC premium of self or spouse or children. Under this section, the payment of the tuition fees for the 2 children is indeed privileged. In two ways the contribution of the PPF is advantageous. Initially, the interest on PPF gets exempted via income tax non u/s 10(11) of the Income Tax Act and the other in terms of the amount stored in the PPF account would not be attached through any authority or court.
Income Tax Section 80CCD (1B)
- An additional Rs 50,000 would be availed as an exemption for contribution in the National Pension System (NPS) scheme under section 80CCD (1B) of the Income Tax Act.
Home Loan Interest
- If a person has opted for a home loan and then he repays the interest over Rs 2 lakhs then he could avail up to a maximum amount of Rs. 2 lakhs from his taxable income under section 24B of Income Tax.
Health Insurance Premiums
- An exemption of Rs 25000 can be claimed towards the payment of the health insurance premiums for health insurance of self, spouse & children under Section 80D of the Income Tax Act But if the person furnished the health insurance of his senior citizen parents then another exemption of Rs 50000 could be claimed. This is another way of saving income tax for salaried and individual persons.
Deduction for Health Check-up
- The person would claim for the preventive health check-up deduction with the limit of up to Rs 5000 per financial year beneath section 80D. The same preventive health check-up deductions are engaged in the mentioned 80D limit of Rs 25000 for the individuals and for senior citizens, it is Rs 50000.
Section 80DDB Medical Expenses
- Another exemption u/s 80 DDB of the Income Tax Act for medical treatment of the particular diseases for self or dependent can be claimed. The dependent could be a spouse, parent, or sibling. The exemption is available for medical expenses of Rs 40000 per annum. But towards the medical expenses of the dependent senior citizen, the same privilege is Rs 100000. The same exemption exceeds the exemption u/s 80D of the Income Tax Act.
Exemption Under Section 80G
- A privilege could be claimed under 80G of the income tax act towards the donation to the companies enrolled under section 80G of the income tax. Section 80G of the Income Tax Act, 1961 provides income tax deductions to taxpayers who give donations to charitable firms. The same deduction differs on obtaining firms that rendered that one might claim the deduction of 50% or 100% of the donated amount with or without restrictions.
Hence the taxpayers are subjected to handle his financial concerns and invest through the method that his income payable under the tax reduced to below Rs 5 lakh so that there would be no scene of the income tax which is essential under section 87A of the income tax act.
SAG Infotech always try to help taxpayers by giving important information suggested by top professionals. One more article that is helping taxpayers to save income tax on INR 20 lakhs salary legally along with the accurate example.
