How to do tax planning to save income tax ?

One of the primary goals of tax planning is to direct cash from taxable sources to various
income-generating schemes. This guarantees that money is used efficiently for beneficial
purposes.

The goal of every taxpayer in India is to lower their tax burden and save money for the
future. It is possible to minimise the amount of tax you owe if you invest in accordance with
Income Tax Act of 1961 provisions. The Act includes numerous tax planning investment
options that can considerably decrease your tax obligation.

Here we will discuss some ways of tax planning to save income tax in India.

Enjoying tax benefits by availing home loan under section 80C

You cannot only get the satisfaction of ownership of a home but also the low tax
responsibility by availing home loan opportunities. Many housing schemes are working to
make affordable housing in India like Delhi development authority and Pradhan Mantri Awas
Yojana etc.

Section 24b and 80C reduces the tax monetary responsibility. Individuals can also benefit
from section 24b who purchases the property for home construction in case your home
construction is completed within 5 years. You can also declare additional deductions through
the 80C section if you are a first-time homeowner.

Undertake investment

You can get a higher return through undertaking investment. It is a capital market and here
government directive schemes help to get tax benefits and higher returns. By investing in
different instruments you can get knowledge about saving income tax in India. You can
choose stock market investment tools if you are prepared to manage risk factors. Like,
Equity-linked saving schemes.

You can get this tool with a three-year lock-in period and its total investment for eligibility of
tax remission is up to 1.5 lac INR. In case of gaining capital below 1 lac INR, there is no tax
to pay on profit.

Invest your money in Government projects

Many government-authorized projects provide high returns on total investments along with
tax abdication. Individuals can demand up to 1.5 Lakh rupees spent on such investment as
tax refusal on total annual income, under Section 80C of the Income Tax Act.

Buying health insurance policy

Today health insurance has become a necessity for people because the medical cost is
rising due to bad health conditions that are the cause of many factors. Health insurance
helps to reduce the financial burden of people at the time of the bad condition of health.
Government extends the tax benefits for refreshing people about insurance policies. Due to
health insurance, people can get quality health treatment in top medical institutions with low
charges.

Contribute to the national pension system

This is the deduction above 50,000 RS that is only available for contribution to the NPS
under the 80CCD section. The national pension system allows deducting in fairness and
these funds are built for retirement aggregation and you can withdraw these funds at the age
of 60.

Donate to charity

The contribution made to specific organizations in cash is allowed to add up to 2000 rupees
under Section 80G of the income tax. Contributions can be made through the wire and bank
transfer; on the other hand, they enjoy complete or partial tax immunity, respectively.

If you are contributing to an organization assisting scientific research or rural development,

you are allowed to enjoy deductions under Section 80GGA.

Support a political party

All contributions made to political parties or donations to electoral trusts are allowed for tax
waivers under Section 80GGC of the Act of 1961. The whole amount contributed to your
preferred political party is free from any income tax estimations, given the organization is
registered under Section 29A of the Representation of People Act of 1951.

These contributions are not allowed through cash deposits; such contributions or donations
can only be made through wired or bank transfer.

Deduction on your rent

You can also avail yourself of a tax deduction opportunity on home rent allowance. If you get
a home rent allowance there is the asset of rules that covers the maximum deduction. But if
you pay to rent and do not get a home rent allowance then you will get above 60,000 RS
deduction per annum under the 80GG section.

Keeping money in your saving account

This is a very easy deduction for each individual if they are interested in saving money. You
can save money in the range of 10,000 to 50,000 free of tax per year under the 80TTA
section.

Some Other options to save income tax in India

All the methods described above will give an idea about how to save income tax in India.
Except these some other options should be kept in mind to save income tax, such as:
● Under Section 80E, you can give up any tax payment on the interest component of
education loans. But these benefits are only allowed for the first eight years of loan
repayment.

● If you are disabled, you can avail of tax relaxation according to Section 80U.

● Amount up to 75,000 can be claimed to finance the expenditure of individuals having

disability about 40% or higher than this.

● On medical expenses or medical bills, you also can get tax relaxation according to
rules in the Act.