As soon as you start earning, you begin worrying about the taxes. How much taxes are going to be deducted? How much are you going to save after all that deductions? Well, thankfully there are more ways than one for you to save up on tax payments. So, set out your income tax calculator online and consider the following tax exemptions.
- Home loans
Home loans are eligible for a tax deduction of up to INR 1.5 lakh under Section 80C. You can get further tax deductions of up to INR 2 lakh yearly on the interest of the home loan. So, getting a home loan has two-fold benefits – you get major tax exemptions and a beautiful, new home for you and your family.
- Health insurance policy
In today’s times, the cost of healthcare is showing a steady rise. Thus, getting a health insurance policy has become more compulsory than ever. The fact that you can get tax deductions for your premiums under Section 80D is an added advantage. Based on your age and occupation, you might be entitled to other deductions as well.
- Government schemes
There are many government schemes where you can save to get not just good returns, but also tax exemptions. So, under Section 80C, you can claim up to INR 1.5 lakh on tax deductions. Here is a list of government schemes that allow you to make secure investments:
- National Pension Scheme (NPS)
- Senior Citizen Savings Scheme (SCSS)
- Public Provident Fund (PPF)
- Sukanya Samriddhi Yojana (SSY)
- Life insurance plans
When you get a life insurance plan, you ensure that your dependents have the financial support necessary even after your death. In any case, you can claim up to INR 1.5 lakh on tax deductions under Section 80C of the Income Tax Act.
Even if you decide to go for a United Linked Insurance Plan rather than a general life insurance policy, you will still earn tax exemptions on the insurance component of it.
- Equity Linked Saving
This is another investment tool that is related to the stock market. You have a three-year lock-in period. Also, you can claim up to INR 1.5 lakh on tax deductions under Section 80C of the Income Tax Act. However, if your capital gains remain below INR 1 lakh, then you will not have to pay any taxes on the profits.
- Tax-saving fixed deposits
As per Section 80C of the Income Tax Act, you can claim up to INR 1.5 lakh on tax deductions by investing in tax-saving fixed deposits. The fact that your funds are locked in for a period of five years is also advantageous. You are assured of the fact that you have a sizable amount saved up in the bank for later use or bigger investments.
As you can see, all the six ways mentioned above not just ensure tax exemptions but also offer other benefits. It is up to you now to choose the suitable avenues.