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investment options to save tax. The Income Tax Act offers many incentives and
allowances, apart from the popular 80C, to reduce tax liability. Here we list out
seven smart tips to help you save more and also reduce taxes.
1. Have a separate independent income-tax file for every member in the family:
The objective of this is to achieve tax planning and cut down on your income-tax
payments. The concept of giving a loan to your spouse or a gift to your children will
help you diversify and reduce tax liabilities. However, you need to be aware of the
fact that your wife can receive gift from any relative other than her husband, fatherin-law and her mother-in-law. To take a loan with reasonable interest from anyone,
including your spouse is permissible under the law.
In case your spouse or child owns a residential accommodation in the location where
you reside, then these deductions will not be available for you.
For salaried employees who get HRA allowance, the minimum amongst the following
three is permitted for tax deductions:
7. Medical expenditure:
Make use of deductions allowed for up to Rs 40,000 spent on treatment of specified
diseases suffered by yourself or a dependent relative. These help reduce your total
tax liability.