{"id":3075,"date":"2022-08-25T22:48:12","date_gmt":"2022-08-25T17:18:12","guid":{"rendered":"https:\/\/aayushbhaskar.com\/?p=3075"},"modified":"2022-08-26T15:12:40","modified_gmt":"2022-08-26T09:42:40","slug":"ways-to-save-income-tax-india","status":"publish","type":"post","link":"https:\/\/aayushbhaskar.com\/ways-to-save-income-tax-india\/","title":{"rendered":"12 Ways To Save Income Tax In India","gt_translate_keys":[{"key":"rendered","format":"text"}]},"content":{"rendered":"<p><span data-preserver-spaces=\"true\">Everybody is always looking for ways to save some bit of their income tax. <\/span><\/p>\n<p><span data-preserver-spaces=\"true\">They like grabbing any opportunity that comes the way that helps them save income tax in India. <\/span><\/p>\n<p><span data-preserver-spaces=\"true\">However, different people have different preferred methods of doing so. Whether you are a salaried employee or have a business, there are many ways to save India&#8217;s income tax. <\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Claiming tax rebates has multiple options under different sections, and it helps you reduce your taxable income.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">If you are also one of the people trying to find ways on how to save income tax in India, below are 12 efficient ways to do it \u2013<\/span><\/p>\n<h2><strong><span data-preserver-spaces=\"true\">\u00a01. Tax Deductions Under Section 80C<\/span><\/strong><\/h2>\n<p><span data-preserver-spaces=\"true\">Several investment options help one save taxes. Under\u00a0<\/span><span data-preserver-spaces=\"true\">section 80C<\/span><span data-preserver-spaces=\"true\">, the significant ways in which you can save tax is through:<\/span><\/p>\n<ul>\n<li>Investing in Equity Linked Saving Schemes (ELSS) and saving up to Rs. 46,800 in taxes.<\/li>\n<li><span data-preserver-spaces=\"true\">Invest in tax-saving Fixed Deposits with a lock-in period of 5 years.<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Investments in Public Provident Fund with a lock-in period of 15 years (minimum), further extended by five years if needed.<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Investing in Employee Provident Fund is tax-free if it is withdrawn after five years of continuous service.<\/span><\/li>\n<li><span data-preserver-spaces=\"true\"><span data-preserver-spaces=\"true\"> Investments in <a href=\"https:\/\/aayushbhaskar.com\/nps-benefits\/\">National Pension System<\/a> allows pension after retirement to the unrecognized sector and working professionals of India.<\/span><\/span><\/li>\n<\/ul>\n<h2>2. Tax Deductions Under Section 80D<\/h2>\n<p><span data-preserver-spaces=\"true\">Section 80D\u00a0allows tax deductions for a salaried employee based on medical expenses\/insurance. <\/span><\/p>\n<p><span data-preserver-spaces=\"true\">A claim of Rs. 25,000 is an exemption on insurance for self, spouse, and (dependent) children. <\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Additional tax deductions are available for parents for up to Rs. 25,000 provided the parents are less than 60 years old. If the parents are more than 60 years old, the deductions are up to Rs. 50,000<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The maximum deductions are Rs. 1 lakh if both the taxpayer and their parents are more than 60 years of age.<\/span><span data-preserver-spaces=\"true\">\u00a0<\/span><\/p>\n<h2><strong><span data-preserver-spaces=\"true\">3. Tax Deductions Under Section 80DD<\/span><\/strong><\/h2>\n<p><span data-preserver-spaces=\"true\">\u00a0Section 80DD interprets the\u00a0Disability Deductions for an individual&#8217;s disabled relative. Any expenditure that one incurs on treatment, training, and rehabilitation of a disabled dependant relative is covered in this section.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Fixed deduction of Rs. 75,000 if the disability is between 40% to 80%. In a severe disability (more than 80%), the fixed deduction is Rs. 1,25,000.<\/span><\/p>\n<h2><span data-preserver-spaces=\"true\">\u00a0<\/span><strong><span data-preserver-spaces=\"true\">4. House Rent Allowance<\/span><\/strong><\/h2>\n<p><span data-preserver-spaces=\"true\">HRA is a part of the salary structure for most employees. It is exempted under\u00a0<\/span><a href=\"https:\/\/economictimes.indiatimes.com\/small-biz\/sme-sector\/why-technology-is-the-only-path-to-sustained-growth-for-msmes\/articleshow\/80281133.cms\"><span data-preserver-spaces=\"true\">section 10 (13A)<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0of the Income Tax Act 1961. <\/span><\/p>\n<p><span data-preserver-spaces=\"true\">However, the amount received as HRA is a fully taxable income if the employee lives in his own house and doesn&#8217;t pay any rent. The tax exemption under house rent allowance is the minimum of, as follows:<\/span><\/p>\n<ul>\n<li><span data-preserver-spaces=\"true\">Receiving HRA annually.<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Excess of rent paid annually over 10% of annual basic salary.<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">50% of salary for people living in metro cities, and 40% for those living in non-metro cities.<\/span><\/li>\n<\/ul>\n<p><span data-preserver-spaces=\"true\">There are some unique scenarios when one wants to claim tax benefit through HRA like:\u00a0<\/span><\/p>\n<ul>\n<li><span data-preserver-spaces=\"true\">Paying rent to family members\/relatives.<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Owning a house, but staying on rent in a different city.<\/span><\/li>\n<\/ul>\n<h2><strong><span data-preserver-spaces=\"true\">5. Tax Benefits through a Home Loan<\/span><\/strong><\/h2>\n<p><span data-preserver-spaces=\"true\">The Indian government keeps encouraging its citizens to invest in a house and own one. A <\/span><span data-preserver-spaces=\"true\">home loan<\/span><span data-preserver-spaces=\"true\">\u00a0is eligible for a tax deduction. <\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Here are the following significant deductions amongst the several when you plan to buy or build a house on a house loan:<\/span><\/p>\n<ul>\n<li><span data-preserver-spaces=\"true\">You can claim up to Rs. 2 lakh from your income as a tax deduction for your home loan&#8217;s interest payment&#8217;s EMI. One can only claim this interest once the construction of your house is complete.<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">If you have not moved to your property yet but are still paying the EMIs, you can claim the pre-construction interests tax benefit. The maximum eligibility remains capped at Rs. 2 lakh in a year.<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">The amount is deducted from the principal payment of the home loan, too. One can claim Rs. 1.5 lakh under this segment at max.\u00a0<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Maximum interest claim of Rs. 2 lakh can be taken under a joint home loan by each party. For principal payment, a maximum of Rs. 1.5 lakh can be claimed in their individual tax returns.<\/span><\/li>\n<\/ul>\n<h2><strong><span data-preserver-spaces=\"true\">6. Leave Travel Allowance<\/span><\/strong><\/h2>\n<p><span data-preserver-spaces=\"true\">\u00a0LTA is an exemption given to the salaried classes during the years of their service and even after the retirement or termination of the services.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\"> It is an allowance that an employee receives from their employer when traveling on leave.\u00a0LTA exemption\u00a0is only available for two journeys performed in a block of four calendar years. <\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The expenses covered are only the main travel costs, i.e., the travel fare.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">\u00a0There are a few conditions to claim LTA:<\/span><\/p>\n<ul>\n<li><span data-preserver-spaces=\"true\">An actual journey should take place to avail of the exemption.<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Only domestic travel (i.e., within India) is covered under this exemption.<\/span><\/li>\n<\/ul>\n<p><span data-preserver-spaces=\"true\">The employee can avail the benefit for themselves or themselves and their family. <\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The family includes the employee&#8217;s spouse, children, and dependant parents and siblings. Not more than two children born after 1 October 1998 are allowed for the exemption.\u00a0<\/span><span data-preserver-spaces=\"true\">\u00a0<\/span><\/p>\n<h2><strong><span data-preserver-spaces=\"true\">7. Tax benefits through Expenses and Reimbursements<\/span><\/strong><\/h2>\n<p><span data-preserver-spaces=\"true\">\u00a0If you are a proprietor, the easiest way to avail tax benefits is by showing expenses for the particular financial year. <\/span><\/p>\n<p><span data-preserver-spaces=\"true\">One can demonstrate several such costs. These include tuition fee expense for children, payment for development authority, purchase of materials, depreciation, etc.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">For a salaried employee, they can avail the same benefit through reimbursements. <\/span><\/p>\n<p><span data-preserver-spaces=\"true\">It is the compensation that the organization pays to the employees for their expenses. <\/span><span data-preserver-spaces=\"true\">Reimbursements<\/span><span data-preserver-spaces=\"true\">\u00a0are of several types: petrol costs, driver&#8217;s salary, expenses incurred during an official trip, etc.<\/span><\/p>\n<h2><strong><span data-preserver-spaces=\"true\">8. Gratuity<\/span><\/strong><\/h2>\n<p><span data-preserver-spaces=\"true\">The employer gives gratuity as a benefit not included in an employee&#8217;s salary. <\/span><\/p>\n<p><span data-preserver-spaces=\"true\">A minimum of 5 years of service is necessary to receive\u00a0<\/span><span data-preserver-spaces=\"true\">gratuity<\/span><span data-preserver-spaces=\"true\"> on retirement, resignation, death, or disability. <\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The least of the following acts as an exemption from taxable income:<\/span><\/p>\n<ul>\n<li><span data-preserver-spaces=\"true\">The last salary multiplied by the number of years of employment multiplied by 15\/26.<\/span><\/li>\n<li><span data-preserver-spaces=\"true\"> 20 lakhs in Gratuity.<\/span><\/li>\n<\/ul>\n<h2><span data-preserver-spaces=\"true\"><strong>9. Tax Benefits on Scholarship for Education and Education Loan<\/strong><\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">To reduce the taxable income, a person can utilize the number of <\/span><a href=\"https:\/\/cleartax.in\/s\/tuition-fees-deduction-under-section-80c\"><span data-preserver-spaces=\"true\">tax benefits provided on education<\/span><\/a><span data-preserver-spaces=\"true\">. <\/span><\/p>\n<p><span data-preserver-spaces=\"true\">T<\/span><span data-preserver-spaces=\"true\">he government has provided tax benefits on children&#8217;s education allowance, tuition fees, and school fees to promote India&#8217;s literacy rate.\u00a0<\/span><\/p>\n<ul>\n<li><span data-preserver-spaces=\"true\">Children&#8217;s education is exempted at Rs. 100 per month up to two children. Additionally, Their hostel expenditure exemption is at Rs. 300 per month up to two children.\u00a0<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">One can also claim School and tuition fees for any educational institution up to Rs. 1.5 lakh.<\/span><\/li>\n<\/ul>\n<h2><strong><span data-preserver-spaces=\"true\">10. Tax Exemptions through Donation or Charity<\/span><\/strong><\/h2>\n<p><span data-preserver-spaces=\"true\">Under\u00a0<a href=\"https:\/\/economictimes.indiatimes.com\/wealth\/tax\/check-before-you-donate-will-you-get-50-or-100-tax-benefit-under-section-80g\/articleshow\/57141227.cms?from=mdr\">section 80G<\/a>, one can avail of tax benefits by doing some good work and donating to a cause. <\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Any Indian entity notified by the tax department for tax deductions comes under this act. You can claim up to 100% donations if you donate to specific lists and entities.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">If you donate in cash, you can claim a maximum of Rs. 2,000. However, if you donate via cheques, bank transfers, or digital methods, there is no maximum upper limit to the rebate.<\/span><span data-preserver-spaces=\"true\">\u00a0<\/span><\/p>\n<h2>11. <strong><span data-preserver-spaces=\"true\">Keep Money In Your Savings Account<\/span><\/strong><span data-preserver-spaces=\"true\">\u00a0<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">The easiest way to save tax is by keeping some money in your savings account. <\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Interest is tax-free Up to Rs. 10,000 in your savings account, according to Section\u00a0<a href=\"https:\/\/www.paisabazaar.com\/tax\/how-to-save-income-tax\/\">80TTA<\/a>. For senior citizens, this limit is Rs. 50,000.<\/span><\/p>\n<h2>12.<strong><span data-preserver-spaces=\"true\"> Life Insurance Plans<\/span><\/strong><\/h2>\n<p><span data-preserver-spaces=\"true\">Opting for a life insurance policy is necessary, irrespective of whether it comes with a tax exemption. <\/span><\/p>\n<p><span data-preserver-spaces=\"true\">One can avail of tax benefits of up to Rs. 1.5 lakh on the premium every year. Purchasing or renewing the life insurance policy is eligible for tax benefits up to Rs. 1.5 lakh as well.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">There are many more ways to save tax in India. <\/span><\/p>\n<p><span data-preserver-spaces=\"true\">However, the points, as mentioned above, are the easiest and sound ones. <\/span><\/p>\n<p><span data-preserver-spaces=\"true\">You can also choose a few options instead of just one and make a portfolio of the alternatives to tax exemption. <\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Ensure that whatever option you select entirely aligns with your long term goals, financial objectives, and liquidity needs.<\/span><\/p>\n<img src=\"https:\/\/i0.wp.com\/aayushbhaskar.com\/wp-content\/uploads\/2021\/01\/12-Ways-to-Save-Income-tax-in-India-main-img.png?w=800&#038;ssl=1\" class=\"ss-hidden-pin-image\" alt=\"\" data-pin-url=\"https:\/\/aayushbhaskar.com\/ways-to-save-income-tax-india\/\" data-pin-media=\"https:\/\/i0.wp.com\/aayushbhaskar.com\/wp-content\/uploads\/2021\/01\/12-Ways-to-Save-Income-tax-in-India-main-img.png?w=800&#038;ssl=1\" data-pin-description=\"12 Ways To Save Income Tax In India\" data-recalc-dims=\"1\"\/>","protected":false,"gt_translate_keys":[{"key":"rendered","format":"html"}]},"excerpt":{"rendered":"<p>Everybody is always looking for ways to save some bit of their income tax. They like grabbing any opportunity that comes the way that helps them save income tax in India. However, different people have different preferred methods of doing so. Whether you are a salaried employee or have a business, there are many ways &hellip;<\/p>\n<img src=\"https:\/\/aayushbhaskar.com\/wp-content\/uploads\/2021\/01\/12-Ways-to-Save-Income-tax-in-India-main-img.png\" class=\"ss-hidden-pin-image\" alt=\"\" data-pin-url=\"https:\/\/aayushbhaskar.com\/ways-to-save-income-tax-india\/\" data-pin-media=\"https:\/\/aayushbhaskar.com\/wp-content\/uploads\/2021\/01\/12-Ways-to-Save-Income-tax-in-India-main-img.png\" data-pin-description=\"12 Ways To Save Income Tax In India\"\/>","protected":false,"gt_translate_keys":[{"key":"rendered","format":"html"}]},"author":4,"featured_media":3091,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[6],"tags":[],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"https:\/\/aayushbhaskar.com\/wp-content\/uploads\/2021\/01\/12-Ways-to-Save-Income-tax-in-India-main-img.png","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v15.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>12 Ways To Save Income Tax In India - Aayush Bhaskar<\/title>\n<meta name=\"description\" content=\"Everybody is always looking for ways to save some bit of their income tax. Here are 12 easy and ethical ways to save income tax in India.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/aayushbhaskar.com\/ways-to-save-income-tax-india\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"12 Ways To Save Income Tax In India - Aayush Bhaskar\" \/>\n<meta property=\"og:description\" content=\"Everybody is always looking for ways to save some bit of their income tax. Here are 12 easy and ethical ways to save income tax in India.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/aayushbhaskar.com\/ways-to-save-income-tax-india\/\" \/>\n<meta property=\"og:site_name\" content=\"Aayush Bhaskar\" \/>\n<meta property=\"article:published_time\" content=\"2022-08-25T17:18:12+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-08-26T09:42:40+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/aayushbhaskar.com\/wp-content\/uploads\/2021\/01\/12-Ways-to-Save-Income-tax-in-India-main-img.png\" \/>\n\t<meta property=\"og:image:width\" content=\"1920\" \/>\n\t<meta property=\"og:image:height\" content=\"1080\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@FinAayush\" \/>\n<meta name=\"twitter:site\" content=\"@AforBhaskar\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\">\n\t<meta name=\"twitter:data1\" content=\"6 minutes\">\n<!-- \/ Yoast SEO Premium plugin. -->","gt_translate_keys":[{"key":"link","format":"url"}],"_links":{"self":[{"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/posts\/3075"}],"collection":[{"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/comments?post=3075"}],"version-history":[{"count":0,"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/posts\/3075\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/media\/3091"}],"wp:attachment":[{"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/media?parent=3075"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/categories?post=3075"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/tags?post=3075"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}