How to spend much less revenue tax? If you are a taxpayer, this one query need to have come to you your thoughts, at least as soon as. There is no way you can prevent paying revenue tax if you have a taxable revenue. But you can handle your taxes and minimize liability via appropriate arranging.
Interestingly, tax-saving is linked to investments and expenditures. In other words, the Income Tax guidelines let exemption from paying taxes on particular investments and expenditures. You can optimize tax-saving investments and expenditures each year to minimize your tax liability.
Here’s a look at seven sure shot methods to minimize your tax liability:
1. Start arranging and saving for your retirement.
If you strategy to spend much less tax each year, start off arranging and investing for your retirement now. Wondering, why?
The Income Tax guidelines let a deduction up to Rs 1.5 lakh on particular investments. If you make the complete investment in these selections, then your taxable revenue will minimize by 1.5 lakh.
Your investment selections for this advantage are schemes like PPF, NPS, EPF, Tax Saving FD and so on.
Abhishek Soni, Co-founder and CEO, Tax2win.in, says: “Start Savings for your retirement which will also help in tax saving through investments in PPF, NPS, EPF, Tax Saving FD, etc. which is eligible for deduction under section 80C up to Rs. 1,50,000.”
2. Maintain a record of healthcare bills of your senior citizen parents and spend them on the internet
Soni suggests you need to preserve records of healthcare bills of your senior citizen parents and spend such bills via on the internet mode to get deduction u/s 80D up to Rs. 50,000.
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3. Keep rent receipt and rent agreement for HRA advantage
If you are living in a rented accommodation preserve rent receipts and rent agreement with you to claim HRA exemption to minimize your tax liability. You also have to have PAN of your landlord if your annual rent is above Rs 1 lakh.
4. Buy overall health insurance coverage for oneself and your family
You need to get a overall health insurance coverage policy for oneself and your family members. This will assist you claim the deduction of premium paid beneath sections 80C and 80D.
5. Invest in tax-saving MFs
You can also invest in many tax-saving Mutual funds(ELSS), which will assist in acquiring returns on the invested quantity as nicely as you are eligible for acquiring a deduction up to Rs 1,50,000 u/s 80C, Soni mentioned.
However, you would be capable to claim the deduction of the size of your investment in a tax-saving mutual fund scheme only if your investments in other schemes that qualify for deduction beneath Section80C is not Rs 1.5 lakh currently.
Under Section80C, the total deduction that can be claimed in lieu of investment in all eligible schemes is Rs 1.5 lakh. Not more than that.
6. Invest in NPS
You can also invest in NPS and claim the more deduction of Rs. 50,000 beneath section 80CCD(1B). This deduction is readily available in addition to section 80C deduction.
7. Ask your employer to contribute in NPS on your behalf
According to Soni, your employer can contribute to the NPS on your behalf. This is eligible for the more deduction (up to 10% of Basic salary and DA).