Ways to save tax – Best TAX saving options
Choose a tax saving option based on your risk appetite, expectations of returns and the time at which you need the money.
How much do you have to save?
- Are you covered by the provident fund?
Your contribution is eligible for deduction
- Are you repaying a housing loan?
The principle of the EMI can be deducted
- Do you have existing life insurance and pension plans?
The premium paid is eligible for deduction.
- Do you have School going children?
The School fees comes under section 80C.
You have to invest and save depends upon your risk appetite, Liquidity retirements, expectations of returns etc.
As you know, Investment provides higher returns are more riskier than investment provides lower returns.
Other ways to save tax – see if you are eligible for these deductions as well.
- HEALTH INSURANCE : Up to Rs 15,000 premium paid for self, spouse and children is eligible for deduction under Section 80D. An additional Rs 15,000 deduction for insuring health of parents (Rs 20,000, if they are senior citizens).
- PREVENTIVE HEALTH CARE : Up to Rs 5,000 paid for medical check-ups of self, spouse and children is eligible for deduction under Section 80D. The deduction claimed cannot exceed Rs 15,000 (Rs 20,000 for senior citizens).
- HOME LOAN : Up to Rs 1.5 lakh interest paid on loan for a self occupied house is eligible for deduction under Section 24(b). The entire interest paid is eligible for deduction if the house has been rented out.
- EDUCATION LOAN : The entire interest paid on education loan for self or child is eligible for deduction under Section 80E. The deduction on loan is available for a maximum of eight financial years.
- HRA : HRA is exempt if you fulfill certain criteria. Even if you don’t get HRA as part of your salary, you can claim up to Rs 2,000 a month as exemption under Section 80GG, subject to certain conditions.
- DONATIONS : Donations made to recognized charitable institutions are eligible for deduction under Section 80G. However, donations to political parties are no longer eligible for tax deductions.
Source : ET Wealth