Income Tax News: People in higher tax brackets—those whose salaries exceed 30 lakhs—need to take deliberate steps to save taxes in order to maximise their financial planning. Here’s a guide on practical ways for people making more than 30 lakhs to lower their tax obligations:
Utilize Section 80C Deductions
Invest in tax-saving options including Employee Provident Funds (EPF), Public Provident Funds (PPF), National Savings Certificates (NSC), and Equity Linked Savings Schemes (ELSS) to maximise deductions under Section 80C.
Leverage Section 80D for Health Insurance Premiums
Purchase health insurance for you and your loved ones in order to be eligible for Section 80D discounts. Deductions for health insurance premiums are available for individuals, spouses, and dependent children up to ₹25,000, plus an extra ₹25,000 for parents (₹50,000 for senior persons).
Explore NPS Contributions
To receive further tax benefits, think about making contributions to the National Pension System (NPS). Under Section 80CCD(1B), contributions to NPS are deductible, allowing for an additional deduction of up to ₹50,000 beyond the Section 80C cap.
Optimize Home Loan Benefits
Make sure to claim deductions for principal payments (under Section 80C) and interest payment (under Section 24) if you have a home loan.
Maximize HRA and LTA
When possible, maximise your House Rent Allowance (HRA) exemptions by claiming exclusions under Section 10(13A) and submitting rent receipts. Furthermore, make use of Leave Travel Allowance (LTA) to cover domestic travel costs and submit Section 10(5) exemption claims.