You can secure income tax upto 1.5 L under section 80C and upto 50,000 with the help of health insurance or mediclaim. Salaried individuals are the type of people that have to pay maximum taxes in our country. This seldom leads to disappointment within salaried individuals. Of course, who would be happy knowing that half of the hard-earned income has been subtracted in the form of taxes? But with the right tax planning methods, it is possible to save your income from tax accountabilities. Here are some ways that will help you secure income taxes as a salaried individual.
Restructure your salary
We seldom spend money from our personal account on expenses, which are actually the company’s or employer’s necessities. For example, If you wear a uniform for your job or talk to a client with your personal mobile phone. Such expenses should surely be covered by your employer. Request for the restructuring of your salary if you are the one who is paying for the following charges. Some allowances which save tax
- Newspaper, Books, and Magazine
- Medical Treatment
- Telephone and Mobile
- Office Entertainment
Make use of section 80C
Under section 80C, you can avail the highest tax deduction of Rs 1 lakh by investing in any of the following options
- ELSS(Equity linked saving scheme)
- Public provident fund
- Life insurance policy
- Fixed deposits
- National saving certificates
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Save tax on rent payment
You may be operating outside your city and do not have company accommodation. Expenses on rent payment should be subtracted from your taxable income. House rent allowances comprise 25 % of the total income. However, the deduction will not be permitted if you own a residential house in that location.
Reimburse travel and medical expenses
Personal expenses, such as travel and medical, are also tax-deductible. However, you will be needed to provide precise receipts and bills in order to impose the deduction. The deduction, under this category, is bounded up to Rs 15,000.
Tax saving from home loans
As a salaried individual, you will always consider a home loan option before purchasing a house. In such a case, do not forget to consider account tax deductions, which are applicable to both principal payments as well as interest payments. Section 80C allows a deduction up to Rs 1 Lakh on the major component of your home loan.
Apart from regarding all the above tax saving options, consult a professional tax planner to avoid any last-minute trouble. It is crucial to start your tax planning well before 31st March and to file your returns before the 31st of July each year.