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PERSONAL FINANCE

EVERYTHING YOU NEED TO KNOW ABOUT TAX SAVING FOR SALARY INCOME IN INDIA

It is quite painful when you have to pay huge sum of taxes for salary income. This write up is meant to help you understand all the methods available to save taxes on income from salary. It is a smart decision to save taxes on salary income by utilizing the methods Government has given to salaried tax payer.

Most of the salaried tax payer knows only about 80C however there are other ways to save taxes. Let’s discuss all these tax saving for salary income point by point. If you do not want to go through hassle of reading and having to analyses and want to talk about tax saving options under salary.

Simply contact us and receive a call within a day from CA for tax planning or tax expert. Now lets discuss the points of most important tax saving tips for salaried tax payers in India:

SECTION 80 CCD (1B) NATIONAL PENSION SCHEME (NPS): You can save additional tax by investing in NPS for 50000. As you know under 80C, the limit is 1.5 lacs, /so this section helps you increase the limit upto 2 lacs under 80C altogether. All you have to do is invest under NPS. If you are under 30% tax bracket, this additional deduction helps you save upto 15000 of income tax.

FILE INCOME TAX RETURN IN INDIA

SECTION 80D HEALTH INSURANCE PREMIUM: This is one of the most important insurance everyone should have. The cost of medical expenses can create a big headache and stress to you and family so taking health insurance is not just good for tax saving but it is extremely important which can save you a lot of stress. The Government in order to encourage provides tax saving benefit not only on your health insurance but family members as well, here is the limits:

  • Upto 25000 tax deduction: For you including your spouse and your children. If any of you or your family members is older than 60 years the limit you can claim is 50000
  • Upto another 25000: For your parents. If parents are older than 60 years limit you can claim is 50000

SECTION 80 DD: If you are taking care of disabled dependent , you can claim tax deductions for same. This is to help disabled dependent in your family. Who are dependent in family? It can be your spouse, children, your parents or your siblings.

List of disabilities covered by this section: Cerebral Palsy, Autism, Mental illness, Blindness, Low vision, Loco- Motor disability, hearing impairment, Mental retardation,

Tax deduction can be claimed on medical treatment expenses, their nursing, training and rehabilitation and on premium paid on any insurance policy taken for them

What is the tax deduction limit?

If 40% disabled: limit is 75000

If 80% disabled: limit ids 125000

SECTION 80E: Tax deduction on education Loan: Deduction is available on interest paid from the year on which repayment starts till the time loan period gets over or till 8th year whichever is earlier.

SECTION 80TTA: Tax Dedduction on interest earned from your saving bank or post office accounts This section is not available for interest earned on FD, RD or your term deposits. Interst upto 10000 is not taxable under this section. So you get deduction of 10000 under this section for interest earned by you during the year. All bank accounts are consolidated, not to be looked at each bank separately. Rest of your interest is chargeable to tax under head income from other sources. For senior citizen the limit is 50000 deduction of same comes under section 80TTB

SECTION 80 C:  This is the most popular section and eligible investments you can made under this section are Investments in Provident Funds such as EPF, PPF, etc., payment made towards life insurance premiums, Equity Linked Saving Schemes, payment made towards the principal sum of a home loan.

If you want to understand these points of tax saving on salary income or want to plan tax saving on salary income from a professional or CA near you, just email us at info@taxvic.com and you shall be contacted with all the help. Thankyou for reading!

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