Giving Yourself Tax-Saving Gifts
If you've been slacking in your work, your boss probably informed you that your tax withholding (TDS) will be higher as a result of your tardiness. Don't be concerned. You may still use these strategies even if you didn't prepare your taxes, because they're simple and effective. Invested Money in tax savings: To begin, see if you've utilized all of your Section 80C tax savings investments. If you belong in the highest income tax bracket, you may invest up to Rs 1.5 lakh in a financial year and save more than Rs 40,000 in taxes alone. Options include PPF or public provident fund (15 years lock-in), ELSS or equity linked saving plan (3 years lock-in), national saving certificate or NSC, and tax-saving bank deposit (both have 5 year lock-in). An employee benefit plan can also be used to invest up to Rs 1.5 million if you are really conservative (EPF). Unlike ELSS and PPF, the EPF sum upon maturity is not subject to income taxes. Interest earned on NSCs and tax-deferred FDs is taxable. By creating a Sukanya Samriddhi Yojana account, you can save money on taxes if you have a female child. Beyond Section 80C : There's no need to be concerned if you've reached the section 80C limit. The National Pension System, sometimes known as the NPS, is a tax-saving tool that extends beyond the 80C tax-saving window. Up to Rs.50,000 in contributions can be deducted from your taxable income. It's possible to save money on medical insurance as well as other areas of taxation. It is not a waste of money even if you are covered by your employer's health care plan. Individuals can save up to Rs 60,000 if they take care of the sub-limits under Section 80D of the Income Tax Act. Last but not least, under section 80GG, you can claim the lowest of 25% of your entire income, Rs 2000 per month, or the excess of rent paid above 10% of your total income if you are self-employed or a salaried employee who does not get House Rental Allowance (HRA). It's important to remember that you're only eligible if neither you nor your spouse or children own any real estate, whether in India or overseas. Gains on Stock Losses: You can save money on taxes by doing this if you're interested in investing in the stock market directly. Short-term capital loss is defined as a loss on a stock exchange transaction if you have held a loss-making share investment for less than a year. Short-term losses that cannot be offset in the current financial year can be carried over to the eight years after that year. Savings on Paper Bills: Exemptions can also be claimed for some personal costs. Your gross compensation will be reduced by these costs. Your company may provide you with a medical allowance in the form of a portion of your income. Her company's HR department informed Aditi that she might save taxes if she could show receipts for her medical expenditures. This allowance is tax-free provided you present original bills. You may save up to Rs 15,000 a year by submitting receipts for medical expenses, so get started now. Allowance for leave travel is another issue that is frequently overlooked. When you're on official leave, you're able to take advantage of this tax break for domestic travel twice in a year. AC-I of rail travel and economy class of air travel can be claimed at their maximum capacity. You may also deduct charitable contributions. You can deduct your gifts to qualifying institutions from your taxes. Contributions to scientific institutes and religious organisations may also qualify you for a tax deduction.