14 Easy Ways To Save Income Tax In 2021 | Credit Help India

Easy Ways To Save Income Tax In India

People are always looking for opportunities and methods to save income tax. Different people go for different ways of tax saving. Therefore, this article is focused on those who want to know more ways and methods to income tax.
Listed below are different ways through which customers can save tax for 2021-2022. If anyone is thinking about how to save income tax and how to save tax in India other than 80C, read this articles.

1. Income Through Savings Account Interest

Interest earned on a savings account is under taxation purposes for a limit of Rs. 10000. This amount is successive in all saving bank accounts. This limit extends to Rs. 50000 in the case of senior citizens.

2. Money Received from Life Insurance Policy

Money from a life insurance policy can be avail on maturity or at the time of claiming the amount.

3.Scholarship for Education

The amount for the scholarship is tax-free under Section 10(16). There are no limits in such a scenario as the complete amount received under private or public scholarship is tax-free.

4.Amount Received From Sold Shares or Sold Equity Mutual Funds

If any amount of long-term capital gain is more than Rs. 1 lakh, then a 10% tax applies to the amount.

5. Income from Agriculture

Every income from agricultural land defined as per section 10(1) is exempted from tax. Income can be related to rent from land, revenue from land, the amount generated through agriculture products, and the amount through a farm building.

6. Amount Received Through Inheritance

The amount received via inheritance in the form of a Will that is not taxable in India.

7.Provisions Under Section 80C

The government of India offers a provision to invest Rs. 1,50,000 as per section 80C of the Income Tax Act. By investing in tax-saving options under 80C, users end up saving money on income tax and on making investments for a safe and secure future. Here’s a list of popular investment options to save tax under section 80C.

  • Public Provident Fund
  • National Pension Scheme
  • Premium Paid for Life Insurance policy
  • National Savings Certificate
  • Equity Linked Savings Scheme
  • Home loan’s principal amount
  • Fixed deposit for five years
  • Sukanya Samariddhi account
  • Children’s tuition fees

8. Amount from Provident Funds

Interest received on the provident fund is not taxable. Users have to wait for five years before withdrawing the amount of Provident Fund.

9. Amount Received from Gratuity

Money received as gratuity is also tax-free up to a limit. The limit for tax-free gratuity is Rs. 20 lakhs.

10. Coupons for Food

Food coupons or meal coupons are commonly not taxable to a limit. They are non-taxable up to Rs. 2600.

11.Standard Deduction

There is a standard deduction of Rs. 40000. This is the maximum amount for the standard deduction.

12.Company Leased Car

The company leased car can be used as the medium to save tax.

13.Expenses for Telephone and Internet

Expenses for Telephone and Internet can be a benefit to gain tax benefits.

14.Amount Received as per Voluntary Retirement Scheme

Many people in India choose to opt for Voluntary Retirement and take a pay-out. The amount received as per the Voluntary Retirement Scheme is not taxable till the limit of Rs. 5 lakhs.

Frequently Asked Questions

1. Which are the different types of income classifications?
There are five ways: income from salary, income from capital gains, profit or gains from business or profession, house property income, and income generated from other sources.

2. Can I save tax for the premium paid for insurance?
Yes, you can save money paid as a tax by paying for life insurance and health insurance.

3. Can I invest in mutual funds to save tax?
Yes, mutual funds can also be viewed as an income tax saving instrument. Make sure to verify whether the mutual funds are tax savers or not.

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