Income Tax Saving: If employed people want to save tax then know easy ways...

Every employed person wants to save tax. This is why they keep an eye on changes in tax slabs in the budget. The interim budget was no different. People were hopeful that Finance Minister Nirmala Sitharaman would give them some relief in this. It is a different matter that nothing like this happened. He did not make any changes in the tax slabs in the interim budget 2024. However, you do not need to be disappointed by this. Here we are telling you about 10 such methods with the help of which you can easily save a good amount of tax. This is for both government and private employees. Apart from this, their benefits are available in both old and new tax regimes.

Section 80C: This is an important provision in the Income Tax Act, of 1961. It allows individuals and Hindu undivided families (HUFs) to avail of tax deductions on certain types of investments and expenses. This helps the taxpayer to reduce his taxable income. The maximum limit of deduction under section 80C is Rs 1,50,000.

What are the major deductions included under Section 80C?
  Life Insurance Premium: You can claim a tax deduction for the premiums paid for your life insurance policy and the life insurance policies of your dependents.

  Pension Scheme Contribution:
You can claim a deduction on contributions made to the National Pension Scheme (NPS), Atal Pension Yojana (APY), Public Provident Fund (PPF), and other pension schemes.

     ELSS Mutual Funds: You can claim a deduction on investments made in Equity Linked Savings Scheme (ELSS).
      Tuition Fees: You can claim a deduction on children's school or college tuition fees.
      Home Loan Interest: You can claim a deduction on the interest paid on your home loan.
      Stamp duty and registration fees: You can claim a deduction on stamp duty and registration fees paid while purchasing a house.

Section 80 CCD(1B): This is an additional deduction under Section 80 CCD(1) of the Income Tax Act, 1961. This deduction is available to those individuals who contribute to the National Pension Scheme (NPS). Under this section, an individual can claim an additional deduction of up to Rs 50,000 on contributions made to the NPS Tier I account. This deduction is in addition to the deduction limit of Rs 1,50,000 available under section 80C.

What is the eligibility for Section 80 CCD(1B)?
      You must have an NPS Tier I account.
      You have to contribute to NPS.
     Your age should be between 18 years to 70 years.

Section 80 CCD (2): This is an additional deduction under Section 80 CCD (1) of the Income Tax Act, 1961. This deduction is available to individuals whose employers contribute to the National Pension Scheme (NPS). Under this section, an individual can claim an additional deduction of up to Rs 10,000 on the contribution made by his employer to the NPS Tier I account. This deduction is in addition to the deduction limit of Rs 1,50,000 available under section 80C. This means those whose employers contribute to NPS can claim a total deduction of up to Rs 2,10,000 under sections 80C, 80 CCD (1), and 80 CCD (2).

What is the eligibility for Section 80 CCD (2)?
     You must have an NPS Tier I account.
     Your employer has to contribute to NPS.
     Your age should be between 18 years to 70 years.

Section 80D: This section of the income tax law allows individuals and Hindu undivided families (HUFs) to avail of tax deductions on health insurance premiums and certain medical expenses. It helps the taxpayer to reduce his taxable income.

  Professional tax deduction: Professional tax is imposed by some states. This is a tax that applies to salaried individuals, self-employed and professionals. This tax is an important source of income for state governments. The maximum deduction for professional tax for the financial year 2023-24 is Rs 2,500. This means you can deduct up to Rs 2,500 from your taxable income. Provided you have paid professional tax.

Leave Travel Allowance: LTA is a type of allowance that employers give to their employees to travel on leave. This allowance helps employees to enjoy their leave and spend time with their families. The amount of LTA is decided by the employer. It is usually one percent of the employee's salary. LTA allowance is taxable, but employees can avail of tax exemption in certain cases. To claim it, employees have to fulfill certain conditions. These include traveling during your leave, submitting travel documents, and applying for an LTA allowance.

House Rent Allowance: HRA is also a kind of allowance that employers give to their employees to take a house on rent. This allowance helps employees to rent houses in expensive cities. The amount of HRA is decided by the employer. It is usually one percent of the employee's salary. HRA allowance is taxable. But, in some cases, employees can avail tax exemption.

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