Tax Saving Tips: Are you worried about huge tax deductions every time? These great methods will save lakhs..

If you are employed, then you have to pay income tax annually according to your income slab. If you are among those people whose huge tax is deducted every year (Income tax saving tips), then you need special planning to save it. If you want, you can save tax. For this, you should adopt a smart investment strategy. This will also save tax (how to save income tax) and other benefits. Let us discuss some tax-saving investment instruments here.

1) Contribute more to NPS
Investing in National Pension Scheme (NPS) gives the benefit of a deduction of up to Rs 1,50,000 under Section 80C (NPS benefits). Apart from this, you can save Rs 50,000 through voluntary contribution to in NPS Tier I account under Section 80CCD (1B) of the Income Tax Act.

2) Buy medical insurance
If you buy medical insurance for yourself, your spouse, or your children, you can claim a deduction of Rs 25,000 for the premium paid under Section 80D of the Income Tax Act. If you buy medical insurance for your dependent parents, you can claim an additional Rs 25,000. If your parents are above 60 years of age, you can claim up to Rs 50,000.

3) Claim home loan principal deduction
Planning to buy a house? Ask your financial planner how to save tax with the help of a home loan. As per ICICI Direct (loan interest deduction), you can claim up to Rs 1,50,000 on repayment of the loan principal.

4) Claim home loan interest deduction too
Apart from the principal amount, you can also claim a deduction on the interest paid on the home loan to save tax (TAX saving hacks). Under Section 24B of the Income Tax Act, you can claim up to Rs 2,00,000 on home loan interest.

5) You will get the benefit of an education loan
If you have taken an education loan for yourself or any of your dependents, then it is a great means of saving tax. Under Section 80E of the Income Tax Act, you can claim the entire interest paid on the education loan taken for higher education (education loan tax benefits). This benefit is available for eight years or till the interest is repaid, whichever is earlier.

6) Claim children's tuition fees
Paying for your children's education can help save tax. You can claim up to Rs 1,50,000 for the amount paid as tuition fees (Tax saving hacks) for up to two children enrolled full-time in an Indian school, college, or university.

7) Buy an electric car
There is a provision in the new tax that if a person takes a loan to buy an electric vehicle, the interest paid up to Rs 1,50,000 (Car loan tax saving tips) can be claimed as a tax deduction under Section 80EEB of the Income Tax Act.

8) You can donate
According to the rules of the Government of India, donations made to certain charitable organizations and NGOs are eligible for tax deduction under Section 80G of the Income Tax Act. Depending on the organization, you can deduct between 50% - 100% of the donation. This is a good thing you can do when you are thinking about saving tax.

9) Donation to a political party
You can also choose to donate to a political party. As a taxpayer, you can claim a deduction for the amount of donation made under section 80GGC of the Income Tax Act.

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