Income Tax News: In India, utilising different tax-saving strategies and intelligent financial planning are necessary to save taxes on salaries above 40 lakhs. The following are some practical methods that those making more than this level can use to reduce their tax liability.
Invest in Equity Linked Saving Schemes (ELSS)
Under Section 80C of the Income Tax Act, ELSS funds provide tax benefits, enabling individuals to claim deductions of up to Rs. 1.5 lakhs yearly.
Utilize the National Pension System (NPS)
Individuals can receive deductions under Section 80CCD(1B) of up to Rs. 1.5 lakhs when they contribute to NPS, in addition to the Section 80C maximum.
Maximize Deductions Under Section 80D
When taxpayers invest in health insurance premiums for themselves, their families, or their parents, they can deduct up to Rs. 25,000 (Rs. 50,000 for senior citizens).
Avail Housing Loan Benefits
Under Sections 80C and 24(b), respectively, the principle and interest paid on home loans are deductible, offering substantial tax benefit.
Utilize Professional Tax Benefits
To lower your taxable income, claim deductions for professional taxes you paid during the fiscal year.
Consider Voluntary Provident Fund (VPF)
Employees might receive additional tax benefits by contributing more to the VPF than the required EPF limit.
Optimize Capital Gains
To reduce tax burden, carefully consider investments in tax-saving options such as ELSS and long-term capital gains from equities investments.
