Tax Saving Tips: Tax saving planning for the current financial year 2023-24 should be started from now itself, as it avoids last minute rush. You can decide the amount of tax exemption required on the basis of liability and exemption on tax deduction from salary or income during your financial year. You can get tax exemption by investing money in some tax saving schemes or other means. However, if you want to save tax apart from investing, here is how taxpayers can save tax on certain expenses.
Under the old tax regime, the provisions of the Income Tax Act, 1961 allow claiming deduction or exemption by way of making certain expenditure or making certain investment. Taxpayers can claim tax exemption on certain expenses without any hassle and extra investment. Let us know under which expenses taxpayers can avail the exemption.
Standard deduction under section 16(IA)
All salaried employees earning salary income are allowed a deduction of up to Rs 50,000 under section 16(IA).
Interest deduction under section 80TTA and 80TTB
Interest is earned on the amount deposited in the bank. The maximum deduction under Section 80TTA can be claimed up to Rs 10,000. Moreover, not only in the case of senior citizens, residents of the Commissionerate of 60 years and above can take such deduction up to Rs.50,000 under section 80TTB.
Payment of Life Insurance Premium
Life insurance is a social security benefit offered by individuals for themselves as well as their families. Taxpayers making life insurance contributions for self, spouse and children in the family can claim tax exemption of up to Rs 1.5 lakh under section 80C.
Discount on Mediclaim premium payment
Due to medical inflation and epidemic, most people have started getting medical insurance. 25,000 under 80D and Rs.50 in case of senior citizens on mediclaim premium paid by an individual in respect of medical insurance for self, spouse, dependent children or parents or contribution to a Central Government Health Scheme/Notified Scheme Deduction can be claimed up to Rs. Apart from this, a discount of up to Rs 5 thousand is given on health checkup.
Deduction on rent paid under section 80GG
Persons receiving house rent allowance can claim exemption under section 10(13A) of the IT Act. However, persons who are not getting house rent allowance but still paying rent can avail deduction under section 80GG of I.T.
Travel discount claim
Most people plan to hang out with the family during the holidays. In such a situation, deduction can be claimed on the expenditure incurred on the journey. This exemption can be taken under section 10(5).
Home loan repayment
Taking a home loan is a common option for buying a property. Individual taxpayers can also claim interest on home loan under section 24(b). Such interest deduction is limited to two lakh rupees. In addition, the taxpayer can claim deduction of principal component of repayment under section 80C of the IT Act.
