Who likes to pay Income Tax? Well, No one in their right mind would choose to pay it if there is a choice not to pay it. Every tax-payer may have dreamt about a country free of tax, which is an impossible dream to come true. Thankfully, there are ways to save tax legally. The government has made some exemptions from which we can save our taxes.
There are many investment schemes that are available such as PPF and NPS being the most attractive ones. PPF i.e. A long-term retirement scheme which has an appealing rate of interest on the total amount invested with the help of small monthly installments. NPS is the same as PPF but it is available for employees who work in public as well as private sector, even unorganized small-scale sectors can benefit from it. These are great options to save tax, but if you are looking for something that is investment free then this article is for you. Below are some choices you have to save tax without investment.
Housing Loans
Owning a house is considered as a gauge to judge the success of an individual. The Bigger the house is, the better. Everyone wants an own house and the Government of India fosters their thought by providing them home loans which have tax benefits. Housing Loans or Home Loans are considered as the pick of the bunch in saving tax. From Registration till Starting the EMI after the Possession, every part helps you save tax in some or the other way. If everything is satisfied according to their particular sections, one can save a max of 7 lakhs if you take a home loan. According to section 80C, the principal and stamp duty is reduced by 1.5 lakhs each, Section 24b saves up to 2 Lakhs, Section 80EE and Section 80 EEA gives you the tax benefit of 50 thousand and 1.5 lakhs respectively, given that their conditions complement.
Benefits in Medical Payment
The whole world is suffering from COVID-19 and to treat this disease having medical / health insurance is a must nowadays. A normal full body checkup will cost you around 10k. Therefore, you may claim your medical policies for dependent children, parents, self and spouse. up to INR 5,000 of these expenses incurred to you. In case, the expenses of up to INR 50,000 are also claimable if that is used for your senior citizen parents. Apart from this, under section 80D, there is an allowed assert deduction for installments or premiums which are paid in the form of health insurance.
Increasing EPF contributions with the help of VPF
EPF or Employee Provident Fund is essential for post-retirement plans. It is a savings plan in which employees have to pay 12% of their basic salary and the employer has to pay the same amount in EPF. This will be returned once you’re retired or have been unemployed for more than 2 months. If a person wishes to invest more than 12% of their salary then with the help of VPF or Voluntary Provident Fund scheme they can pay up to 100% of their salary and dearness allowance. You may also invest in Employee State Insurance Corporation (ESIC) where ESIC UDC manages all your data to make sure that everything is in order. This is the best way to save tax and it will give its benefit in your sexagenarian age.
Paying Rent and Educational fees.
Accommodation and education are a big chunk of our expenses. But thankfully we have section 80C in education which gives a claim a deduction up to 1.5 lakh. This benefits only if you apply in a full time and not part time education, also the institution should be registered. Institutions can be anything like colleges, schools, etc. These benefits are claimable on 2 kids per taxpayer. It only applies to tuition fees and not on any other fee which is included in the monthly fee structure. For Accommodation, Section 10(13) is a boon for rent payers as it exempts rent up to 5000 pm. To claim these benefits, one should be a salaried person and not a business owner.
There you have it, some of the most useful tips in saving taxes. Implement them smartly and save an enormous amount which were paid in the name of tax. Well, if you want to manage these things on your own you must check out the ESIC UDC syllabus which will give you an opportunity to work in the system extending a helping hand to serve the people.