Best Ways to Save Tax Legally

 It is difficult for a common man to survive in today’s world. The constant inflation has already made his life miserable and above that, the tension of paying high taxes, at the end of the financial year has taken a further toll on his health.  You might not able to shun completely the financial problems, but you can certainly reduce the extent of your expenses, at least, in case of tax payment, if you put your mind into it. So, why not explore some legal ways, which can help you to save your taxes?

 Tax Saving  Tax Saving under Sec 80 C, Sec 80 CCC & Sec 80 CCD– If you want to save tax, then you need to start planning your investment. In order to encourage people to save and invest money in a resourceful way government of India allows a deduction for tax payment if a person invests in any of the instruments listed under Sec 80 C, Sec 80 CCC & Sec 80 CCD.  Some of these popular investment instruments are as follows-  Pension Plans  Life Insurance Policy  Public Provident Fund  National Savings Certificate  Fixed Deposit for 5 years (Maximum Investment up to Rs. 1.5 lac)  Employees’ Provident Fund  National Pension Scheme

 The maximum deduction allowed under all three sections combined is Rs.1.5 lac. However, if a person invests in National Pension Scheme, he gets an additional deduction of Rs.50, 000, under Sec 80 CCD.   Investment on Health Insurance– There is another awesome option that ensures not only your health but also saves you tax. Yes, we are talking about Health Insurance premium of the insured, his spouse or kids. Under, Sec 80 D, an individual can save up to Rs.20, 000, whereas, a senior citizen who invested in Health Insurance will be provided a deduction of Rs. 25,000 to Rs.30, 000.  Buy a Home, Save Tax– Taking up loan to buy home for saving tax is a smart decision. Since, tax deduction in case of home loan is claimed under three different sections, thus the taxpayer can enjoy huge tax relief.  The Repayment of Home Loan divided into two parts-

 Investment in The Name of Your Child- If investment is made in the name of your child or maximum two children, you will get the small deduction of Rs.1, 500 per child. You can go for fixed deposit of 1 year and the 10% return that you will be exempted from tax.  Life Insurance Policy Saves Tax-If any individual has bought Life Insurance Policy for himself, his spouse, his children or any student that he is a guardian of, then he is excused from paying tax in case of repayment of interest of education loans under Sec 80 E. However, the deduction is allowed only for interest amount, not principle amount. Life Insurance Policy

 Conclusion: – If you do not declare your planned tax saving, investment and expenses of the year, the expected taxes will be higher. Consequently, the employer would start deducting TDS every month for the first quarter of the financial year. It might happen that when you declare all of your tax savings measures, it might be very late. Therefore, it is better to start saving tax through regular investment from the beginning of the financial year.

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