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Income Tax News: Hurray, BIG Tax Saving Tips! 10 Smart Ways Salaried Individuals Can Save Tax in FY 2023-24

Reduce Your Tax in 2024: 10 Smart Strategies for Salaried Individuals

Income Tax News: Saving tax is crucial for salaried individuals, as it helps you maximise your disposable income and achieve your financial goals. With the Income-tax Act, 1961 offering various deductions and exemptions, there are several ways to reduce your tax burden. Here are 10 smart strategies to consider for FY 2023-24:

Maximise Section 80C Deductions

  1. Invest Wisely: Utilise Section 80C to claim deductions for investments like PPF, ELSS, NPS, tax-saving FDs, NSCs, and life insurance premiums. You can claim up to Rs 1.5 lakh annually.
  2. NPS Advantage: Contribute to the National Pension System (NPS) for an additional deduction of Rs 50,000 (over and above the Rs 1.5 lakh limit).
  3. Employer NPS Contribution: If your employer contributes to your NPS, you can claim an additional deduction of up to 10% of your salary (basic + DA) under Section 80CCD(2).

Claim Health Insurance Premiums

  1. Stay Covered: Opt for health insurance for yourself, spouse, dependent children, and parents. Claim deductions under Section 80D:
    • Up to Rs 25,000 for self, spouse, and children.
    • Up to Rs 50,000 for senior citizen parents.
    • Up to Rs 5,000 for preventive health checkups.

Leverage Other Deductions

  1. Professional Tax Paid: If your employer deducts professional tax, it’s automatically included in your Form 16 and offered as a deduction (old tax regime only).
  2. Domestic Travel Perks: Claim Leave Travel Allowance (LTA) for domestic travel expenses incurred while on leave with family (old tax regime only).
  3. Rent Relief: If you pay rent and receive HRA, claim exemption on the HRA amount. If you don’t receive HRA, you can still claim up to Rs 60,000 annually after calculations (old tax regime only).
  4. Home Loan Benefits: Deduct interest paid on your home loan up to Rs 2 lakh under Section 24(b). Remember, the principal component can be claimed under Section 80C (up to Rs 1.5 lakh).

Additional Tax Savings

  1. Educate Wisely: Claim deductions for interest paid on an education loan under Section 80E (no limit, old tax regime only).
  2. Go Electric: If you’ve taken an electric vehicle loan between April 2019 and March 2023, claim a deduction of up to Rs 1.5 lakh on the interest (Section 80EEB).

Remember

  • These deductions are primarily applicable to the old tax regime. The new tax regime offers limited deductions but boasts lower tax rates.
  • Consult a financial advisor for personalised guidance based on your income, investments, and tax regime choice.

By strategically utilising these deductions and exemptions, you can significantly reduce your tax liability and boost your savings potential. Remember, careful planning and informed decision-making are key to maximising your tax benefits!

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