There are many ways to save income from tax. But the best one will depend upon your income and personal criteria. Given below some ways on how to save income tax.
1. Section 80C
You can save income from tax if you invest in certain schemes. Utilize section 80C for a maximum deduction of up to Rs.1,00,000. invest in any of the options as follows: PPF, EPF, NSC, ELSS, SCSS, NPS, life insurance premium, five-year bank or post office tax saving deposits, kids tuition fees, and principal repayment home loan, mutual funds.
Additional Read: Why you Should Invest in a Systematic Investment Plan or SIP?
2. Beyond section 80C
If you have exhausted the limit of Rs.1,00,000 under the previous section, there are other options: section 80CCC, 80CCD, 80D, 80DD, 80DDB, 80CCG, 24 (B), 80E, 80EE, 80G, 80GG, and 80TTA.
3. Home loans
A deduction up to Rs.1,00,000 is offered under section 80C. The principal loan amount is included in the section. Use it to save more tax.
4. HUF creation
HUF has its own PAN and is thus considered as another entity. It qualifies for all tax deductions under section 80C, 80D, 80G, and 80L.
5. Medial insurance
You can avail tax benefits apart from giving insurance coverage by paying a premium on life insurance.
Additional Read: 5 Things to Consider before Investing in Saving Schemes
6. Leave travel allowance
This is the amount you get from your employer when you are on leave with your family or alone. This amount is tax-free.
Additional Read: Top 5 Safe Investments For The Long-term in India
These are some ways on how to save income tax. The best of which is to invest or get an insurance policy.