save your tax

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Its financial year ending time!!! Hurry up save your tax 

  • Its March, the end of financial year and from April a new financial year will be started. And now you have to pay your tax on your earning.
  • From an employee’s prospective here I would like to highlight that each employee of an organization (With a taxable salary) will make an all out effort to save some tax on his/her earning.
  • However most of us unaware about the various ways to save the tax under the several section of IT Act (Income Tax Act). Yes, The government of India in the IT act has made some provision to get rebate and exemption on your income taxc.
  • Here we will discuss in detail about the various exemption and rebates of the IT Act.
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Income Tax Slab:

  • Before proceeding for the tax saving options, let me tell you about the different slab of Income tax and the slab is applicable according to your monthly gross salary.
  • Here is the table for tax slab, have a look:

 

 

Upto Rs. 2,50,000 Nil Nil
Rs. 2,50,001 to Rs. 3,00,000 10% 10%
Rs. 3,00,001 to Rs. 5,00,000 10% 10%
Rs. 5,00,001 to Rs. 10,00,000 20% 20%
Above Rs. 10,00,000 30% 30%
  • Yes for women, senior citizens and PH the tax slab vary and they will get some additional discount.

Tax saving options:

  • Under the section 80C of income Tax an individual can get an exemption and rebate upto 1.5 lacs per annum on the total income tax for a financial year.
  • Now let me highlight you what is Section 80 C and how a person can get rebate under section 80C.
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  1. Insurance or LIC premium: Any LIC or insurance policy on your or our spouse name you will get the rebate. Whatever premium you are paying for the policy for a financial year, the same amount of rebate you will get in your income tax.
  2. PPF: It is the most attractive, safe, high rate of return and highly liquidity option to save your hard earned money. In the current financial year whatever money you have saved or deposited in the PPF account, you will get the same amount of exemption in the income tax.
  3. NSC Deposit: This is the scheme run by the postal dept of India. You can purchase a NSC Certificate according to your caliber and in the return you will also get the tax rebate while paying the income tax. Of course it is a safest and attractive investment.
  4. Mutual fund, ELIS and 80 CG equity plan: You can also invest in Mutual fund, ELIS and 80 CG equity plan. According to your invested amount you will get the tax emption.
  5. Child education and hostel exemption: If any of your child is studying and for that you have taken any bank loan than also you will get some exemption. The interest whatever you are paying in a financial year, the same percentage of exemption you will get in the income tax. And so in case of the hostel fees for your child.
  6. Loss of house property and capital gain: This is also another option by virtue of which you can save your tax.
  7. Housing loan interest: Whenever you take a housing loan from bank, monthly you need to pay the interest. You will get tax exemption according to your paid interest on your housing loan.
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So all total you can show a saving of 15. Lacs for a financial year and you will get the tax exemption of 1.5 lacs for a financial year.

Good news!!!

Employees those who are under the NPS(New pension scheme) can get a tax benefit of another 50000 for a financial year. Just by saving (Max 50000) in the NPS, you can claim the tax exemption of 50000 for a financial year.

Posted in Tax.