Income tax saving for FY 2022-23: Taxes are vital to the development of the nation and cannot be avoided.
Income tax saving for FY 2022-23: In order to encourage the citizens of the country to adopt the habit of saving more tax, the central government authorizes certain deductions on the amount invested in some distinct instruments under section 80C.
When you become eligible for paying tax then during this initial time period you deal with lots of confusion. Even the idea of paying a small part of your hard-earned money as income tax sounds horrific. However, taxes are vital to the development of the nation and cannot be avoided. People are always looking at options to save the maximum taxes. No one likes to miss out on options that can save them money paid as tax. Different people prefer different ways of doing so.
Here are some simple tips to save taxes effectively :
Use Section 80C
In order to encourage the citizens of the country to adopt the habit of saving more tax, the central government authorizes certain deductions on the amount invested in some distinct instruments under section 80C. Some of the popular tax-saving schemes are :
● Pension plans
● PPF accounts
● Equity mutual funds
● 5-year tax-saving deposits
● Life insurance policies or term plans
Most companies allow the restructuring of certain salary components to lower your tax liability. “If you have a good relationship with your human resources (HR) department, talk to them about adding some allowances to your salary. You can avail of allowances like medical allowance, transport allowance, education allowance, and telephone expenses as part of your salary as they are not taxable. Additionally, go for food coupons instead of lunch allowance, as they are exempt from tax up to ₹60,000 per annum.”said Gaurav Kapoor, Director & Co-Founder, Fincorpit Consulting Private Limited.
Employees normally get House Rent Allowance (HRA) in their income. If you do not have this component included in your salary.” If you live in a rented house and receive rent allowance from the employer, then you, as an employee, can claim exemption on HRA as per the Income Tax Act,” said Amit Gupta, MD, SAG Infotech.
Also, Charitable contributions under section 80G are deductible up to 10% of your income. However, you should ensure that you get a receipt from the organization and a copy of their income tax exemption certificate rather than donating with no acknowledgement, Gupta added.
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