Tax Planning: Apart from Section 80C, you can also save tax through these methods, and know how to get benefits...
People are busy saving tax for the financial year 2022-23. The last date to save tax is March 31, 2023, and now less than 2 months are left. If you are also looking for options to save tax, then you can get deductions under various sections for tax benefits. Explain that most people invest in schemes like Public Provident Fund, ELSS, and NSC to save tax.
To save tax, most people try to make maximum use of the exemption available under Section 80C. However, under this, a maximum exemption of Rs 1.5 lakh is available in a financial year. If you want to save more tax than this, then you have many other options available in which you can save tax by investing, let us know which are those options.
Investment in National Pension System (NPS)
Employees who have an account in the National Pension System can claim additional deductions in addition to the benefits available under Section 80C. NPS is a better option to build a retirement fund and ensure annuity income in old age. In this, you can invest 1.5 lahks annually and an additional 50 thousand rupees under section 80CCD (1B). By investing in NPS, you can take advantage of a total exemption of Rs 2 lakh in Income Tax.
Health insurance for family
You can take health insurance for your family to avail of income tax exemption under section 80. You can also save tax by buying a health insurance policy for your parents, children, or spouse. At the same time, on taking health insurance for parents, you also get an extra benefit of 25 thousand rupees under section 80D. While this deduction limit increases to Rs 50,000 if your parents are above 60 years of age or are senior citizens.
Making a Fixed Deposit (FD) in a Bank
To save tax, you can open a fixed deposit account in the bank in the name of your parents. Having an FD account in the name of your parents gives you a chance to earn more interest on it. Lenders offer higher interest rates on FDs to senior citizens as compared to normal citizens.
Educational Scholarship and Education Loan
When you submit investment proof for a tax deduction, you can also submit documents related to educational scholarships and education loans. Under section 10(16) of the Income Tax Act, any amount received as a scholarship for education is not taxable. On the other hand, if you have taken an education loan, then you get tax exemption under section 80E. However, this deduction is given only for the interest portion of the EMI. There is no tax benefit for the principal portion of the EMI.
A home loan can also save tax
If you have taken a home loan or housing loan to buy a property, it can help you save tax. You can claim a deduction of up to Rs 2 lakh under section 24. Under Section 80EE, the extra deduction is given to home buyers up to a maximum of Rs 50,000. However, the loan for this should have been sanctioned between April 1, 2016, and March 31, 2017. At the same time, the loan amount should not be Rs 35 lakh or less and the value of the property should not be more than Rs 50 lakh.