Money Saving Tips: If your salary is subject to monthly income tax deductions and you are seeking methods to minimize this burden, the following information will be beneficial. Effective tax savings can be achieved through appropriate investment strategies and tax regulations. Notably, implementing these strategies allows you to not only reduce your tax liability but also secure favorable returns on your investments. Here, we present seven straightforward and efficient methods to help you save on income tax while working towards your financial objectives.
These 4 tips will help you to save tax
One of the most recognized and advantageous approaches to tax savings is investing under Section 80C. This provision allows for a tax exemption of up to Rs 1.5 lakh, encompassing options such as the Public Provident Fund (PPF), Life Insurance Policies (LIC), Tax Saving Fixed Deposits, and various other investment schemes. These options not only facilitate tax savings but also offer secure long-term returns.
The National Pension Scheme (NPS) is another excellent choice, enabling you to save for your future while enjoying additional tax benefits. Under Section 80CCD (1B), NPS provides an extra tax deduction of up to Rs 50,000.
For salaried individuals, contributions made by employers to the NPS also qualify for tax exemption, capped at 10% of your total salary, which can significantly enhance your tax savings.
If you have purchased or are considering purchasing a home, you can benefit from tax exemptions on home loan interest under Section 24B. This provision allows for a maximum tax exemption of Rs 2 lakh on home loan interest, effectively lowering your tax liability while providing an opportunity to invest in property.