The Best Investment To Save Income Tax In India

The Best Investment To Save Income Tax In India | Where Can I Invest My Money To Save Tax | India Income Tax Saving Options | Tax Saving Plan | Tax Saving Investments |

Where you can save or invest to get an income tax deduction can be a cloud of thoughts in your mind, especially since the formalities of paying income tax are not far away. The source of income can be one or more of an individual and which part of the income is taxable, you need to know first.

The Best Investment To Save Income Tax In India

The Best Investment To Save Income Tax In India

Here are the five levels in which the sources are divided according to Section 14 of the Income Tax Act:

  • Income from salary [Sections 15, 16, and 17 of the Income Tax Act]
  • Income from real estate
  • Money from Business & Profession [Sections 26 to 44 DA]
  • Capital Gains – Articles 45 to 55.
  • Earnings from other sources [Sections 56 to 59].

But it is not that it will be taxable just by earning. Taxes are assessed according to the tax structure of each financial year. Again, that structure is formed not on the basis of any Nirmoh philosophy. The income tax department is part of the finance department of the country according to age and some other considerations.

India Income Tax Saving Options

Before entering into the discussion on where to save or invest money to get income tax exemption, we need to know, exactly is the tax structure of the country at the moment? It is highlighted-

When The Age Of The Person Concerned Is Less Than 60 Years

Taxable IncomeThe Amount of tax according to the current rules
The Maximum income of 2,50,0000%
If the maximum income is 2,50,001 from to 5,00,0005%
If the maximum income is 5,00,001 from to 7,50,00020%
If the maximum income is 7,50,001 from to 10,00,00020%
If the maximum income is 10,00,001 from to 12,50,00030%
If the maximum income is 12,50,001 from to 15,00,00030%
Earnings when above 15 lakh30%
tax saving plan

When a person is 60 years of age or older but less than 80 years old

Taxable IncomeThe Amount Of Tax Payable
The Maximum income of 2,00,0000%
If the maximum income is 2,00,001 from to 3,00,0000%
If the maximum income is 3,00,001 from to 5,00,0005%
If the maximum income is 5,00,001 from to 7,50,00020%
If the maximum income is 7,50,001 from to 10,00,00020%
If the maximum income is 10,00,001 from to 12,50,00030%
If the maximum income is 12,50,001 from to 15,00,00030%
Earnings when above 15 lakh30%
tax saving plan

When the person concerned is 80 years of age or older

Taxable IncomeThe Amount Of Tax Payable
The Maximum income of 2,50,0000%
If the maximum income is 2,50,001 from to 5,00,0000%
If the maximum income is 5,00,001 from to 7,50,00020%
If the maximum income is 7,50,001 from to 10,00,00020%
If the maximum income is 10,00,001 from to 12,50,00030%
If the maximum income is 12,50,001 from to 15,00,00030%
Earnings when above 15 lakh30%
tax saving plan

where can I invest my money to save tax?

All the income of a person will be taxable, but it may not be. There are several legal ways to get tax exemptions that are not elusive to many taxpayers. For example, a person working in a special position gets some allowances along with his basic salary, on which they are not obliged to pay income tax. Example:

tax saving plan
Tax Saving Plan
  1. The government has sent a citizen abroad to perform special duties. The special allowance that he will get along with the basic salary for this is tax-free.
  2. Income tax is not levied on the special allowances received by the judges of the High Court and the Supreme Court.
  3. Entertainment allowance for government employees is partially taxable.

By applying the rules of income tax, I can see that there are eight main sections in the income tax provision, which inform the taxpayer exactly where an adequate tax deduction is available for investment, savings, and donations. Those eight sections:

  1. Section 80C, Section 60CCD and Section 80CCD.
  2. Section 80D, Section 80DD, Section 80DDB.
  3. Section 24 [Applicable to home loan]
  4. Section 80E [Applicable to education loan obtained from a bank]
  5. Section 80 CCD
  6. Long-Term Capital Gains
  7. Section 80G [Donation / grant in special case / organization]
  8. Sections 54, 54B, 54D, 54EC, 54Ed, 54F, 54G-5 [Long Term Capital Gain].
  • Section 80 cc [Amount of savings or investment and consequent tax deduction. Individuals and joint Hindu families benefiting]
Tax Saving Plan

A) In the case of LICPF etc., the maximum amount of Rs. 1.5 lakh deposited can be deducted from the income of that financial year;

B) Deferred annuity: Here also up to one and a half lakh rupees can be deducted from the total income.

C) According to the Provident Fund Act 1925, the maximum amount of Rs.

D) Similar benefits are available in the case of the Public Provident Fund scheme, 1968.

E) A maximum of Rs. 1.5 lakh of your total investment in LIC’s ‘Dhanraksha Mutual Fund’ will be tax-free.

F) If you have invested in a mutual fund notified by the Central Government and recognized by Section 10 [23D] in the current financial year, you will be covered under tax deduction up to Rs.

G) If you keep money in a state-owned bank under the Home Loan Account Scheme, you will be entitled to 80 cc income tax.

H) You will be able to keep tax-free up to a maximum of Rs. In this case, however, the following conditions must be met:

  1. Tuition fees cannot be combined with development fees, donations, etc .;
  2. Tuition fees will be paid in Indian educational institutions;
  3. The cost of education for a maximum of 2 children will be covered under this calculation. But not more than that.

I) The maximum amount of ‘principal’ you have deposited in the current financial year to repay the housing loan will be tax-free up to a maximum of Rs 30,000.

J) Money purchase of unit purchase of any mutual fund approved by CBDT is tax-free as per 80cc.

K) Depositing money in a tax bank fixed deposit for five years in a scheduled bank will be considered tax-free up to a maximum of Rs.

L) The same relief is available in the case of NSC.

M) Tax-free investment under annuity plan 80CC introduced by LIC.

Section CCD: Those who have become subscribers to the National Pension Scheme introduced by the Central Government will get an additional rebate of Rs 50,000 from taxable income. However, if the term expires, the money received will be considered taxable.

Section 80D: Expenditure on premiums for medical insurance is tax-deductible here. Expenditure for dependent children, wife, and husband is at the stage of tax deduction.

Section 80 DD: This section determines how much tax can be deducted from the maintenance and medical expenses of a physically handicapped person. However, the disabled should be dependent on the income taxpayer.

Let’s see how much discount you can get on rent. Section 10 (133) of the Income-tax Act, which will be read in Section 2, determines this matter. An income taxpayer can keep his / her house rent allowance tax-free if he/she is able to fulfill the following conditions:

  1. If all the rent allowance received is spent to pay the rent.
  2. He is not the owner of his current residence and for that reason, he has to pay rent.
  3. If you want to get the benefit of income tax exemption on rent, you have to show the receipt of rent.

India income tax saving options

We find the details in Section 80C of the Income Tax Act. The amount of this discount is somewhere 100 percent, somewhere 50 percent. If you donate 50% tax exemption to the following funds or organizations:

  1. Jawaharlal Nehru Memorial Fund,
  2. Prime Minister’s Draft Relief Fund,
  3. National Children’s Fund,
  4. Prime Minister’s Flood Relief Fund,
  5. Bharat Sebashram Sangh,
  6. Ramakrishna Mission etc.

You will get a 100% tax saving investments exemption if you contribute to the following fund:

  1. National Defense Fund,
  2. Prime Minister’s National Relief Fund,
  3. National Foundation for Communal Harmony, 4) Accredited University,
  4. Each District Literacy Association,
  5. Central / State Blood Transfusion Council,
  6. Army Central Welfare Fund,
  7. Air Force Central Welfare Fund,
  8. Indian Naval Benevolent Fund,
  9. National Illness Assistance Fund,
  10. Chief Minister Relief Fund,
  11. National Sports Fund,
  12. National Cultural Fund etc.

Special tax deduction for writers

Section 80 QQB (2) of the Income Tax Act provides special income tax benefits for creative writers. Writers here are getting an additional discount of Rs 3 lakh on their writing income. Many people do not get one-time money for writing books. They took royalties on book cuts. A maximum of three lakh rupees of that income is completely tax-free.

Subscriptions paid to recognized political parties: All of them are tax-free as per Section 29A of the Representation of People Act, 1951.

Best Investment To Save Income Tax In India

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