How Can I Pay Less Income Tax?

In how many ways we can save income tax in India?

1. Interest income on saving and NRE account

2. Claim amount collected on life insurance

3. Educational scholarship

4. Profit from selling shares or property mutual funds

5. Earnings received on shares or mutual funds

6. Amount received as gifts on marriage

7. Agriculture income

8. HUF account for secondary income

9. Inherited amount through will

10. Well known tax saving benefits under section 80C

11. Tax savings on additional contribution to NPS

12. Money received from provident funds

13. Tax saving from home loan

14. Tax saving on educational loan

15. Medical insurance and treatment of a disabled dependant relative

16. Medical treatment of detailed disease for self or dependent relative

17. Donations

Tax saving tips for a business person in India

1. Distributed profit to partners in partnership firms

2. Travel or hostel expenses in business

3. Food expenses in business

Tax saving process for salaried persons

1. Leave travel allowance

2. House rent allowance (part of salary)

3. House rent allowance (not part of salary)

4. Income from gratuity

5. Meal coupons

6. Standard deduction

7. Company leased car

8. Telephone or internet expenses

9. Money under voluntarily retirement scheme- up to 5 lakh

How to save tax under Sec 80C & 80D?

• Invest of Rs 1.5 lakh under section 80C to reduce your taxable income
• Buy medical insurance and claim a deduction up to Rs. 25,000 (Rs 50,0000 for senior citizens) for medical insurance premium under Section 80D.
• Claim reduction up to Rs 50,000 on Home Loan Interest under Section 80EE.

Investment options under Sec 80C

The most common tax-saving benefits available to individuals and HUFs in India are under Section 80C of the Income Tax Act. Section 80C holds several investments and expenses you can claim deductions on up to the limit of Rs 1.5 lakh in a financial year.

For more tax-saving investments and expenses, have a note on the following Section 80C:

Best Tax Saving Investment decision under Sec 80C

To pay less income tax, investment in ELSS Fund or Tax Saving Mutual Fund is considered as the best saving option. These funds are specially designed to give you the dual benefit of saving taxes and getting higher returns on investment.

• Invest in ELSS (Equity Linked Savings Scheme) and save up to Rs 46,800 in taxes.
• Lowest locking period of 3 years.Delivered higher returns than FD, PPF or NPS.
• Interest earned is partially taxable.

Here are some section-wise investment limit form the income tax: