If you are a salaried individual, filing your tax returns isn’t something you look forward to. But don’t fret! There are some legitimate ways to save your hard-earned money from being taxed.
As an Indian taxpayer, you can avail of tax benefits in two ways – by claiming certain expenses and by investing in tax-saving instruments. So, here are ten tax saving tips for salaried personsthat can help you take advantage of these two methods.
1. Home loan interest
If you have taken a home loan or a personal loan for home renovation, you can claim tax exemption of up to Rs. 2 lakhs on the interest paid.
Go through Section 24B of the ITA to check if you’re eligible for this tax benefit.
2. Home loan principal
You can avail of a tax exemption of up to Rs. 1.5 lakhs on the principal amount payment of your housing loan or home renovation loan. Refer to Section 80C of the ITA to learn more.
You can claim this tax exemption in addition to the interest exemption under Section 24B and save taxes on a total of Rs. 3.5 lakhs.
3. Education loan interest
While funding education with a personal loan, tax exemption for salaried people is permitted under section 80E of the ITA.
So, if you are sponsoring your child’s education with a loan, you can start claiming tax exemption on the interest amount from the year in which you start repaying. This benefit is available to you for the next 7 years.
Additional Read – 5 Ways to Minimize your Taxes and Maximize Investments
4. Electric vehicle loan interest
Section 80EEB of the ITA allows you a tax exemption of up to Rs 1.5 lakh on the interest paid on EV loans.
Use a personal loan EMI calculator to estimate the interest of your EMI and calculate how much you can save.
5. Employee provident fund (EPF)
Under an EPF scheme, you and your employer can contribute a maximum of 12% of your salary to this fund. You receive a fixed interest rate on this amount, and all of your returns will be tax-free.
6. Tax-saving fixed deposit
With a tax-saving FD, you can make your money grow and also save on taxes. You can claim tax deductions on your tax-savingFD’s invested amount under Section 80C.
7. House Rent Allowance (HRA)
If you live in a rented house, you can claim tax deductions on your HRA, provided that it isn’t included in your basic salary component.
8. Life Insurance
Life insurance premiums are tax-deductible under Section 80C.
9. Health Insurance
Health insurance premiums paid for self, spouse, elderly parents, and children are tax-deductible under Section 80D.
Additional Read – 5 Tips to grow your wealth while saving taxes
10. National Pension Scheme (NPS)
You can claim tax benefits on your NPS contribution under section 80C of the ITA. You can also claim additional deductions of up to Rs. 50,000 under Section 80CCD(1b).
The next time you file your returns, make sure you use the above tips to save taxes.
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