Tax planning is one of the ways which can help you save on taxes and increase your income. The income tax act provides deductions for various investments, savings and expenditure incurred by the taxpayer in a particular financial year.
*ELSS- An equity-linked savings scheme or ELSS is a tax-saving investment under Section 80C of the Income Tax Act, 1961. By investing in ELSS, you can claim a tax rebate of up to Rs 1,50,000 a year and save up to Rs 46,800 a year in taxes. An ELSS is the only kind of mutual fund eligible for tax benefits under Section 80C.
ELSS comes with lowest lock-in among all tax-saving investments which is on 3 years.
*NPS– NPS scheme holds immense value for anyone who works in the private sector and requires a regular pension after retirement. The scheme is portable across jobs and locations, with tax benefits under section 80C and Section 80CCD.
Apart from 80C, below mentioned various other provisions allow deductions to taxpayer:
- 80D- for medical insurance premium for self, spouse & dependent parents
- Section 80EE – Deduction for interest payment of home loan for first home owners
- Section 24- Interest deduction for housing loan upto Rs 2 lakh
- Section 80EEB- interest deduction for vehicle loan for purchase of electric vehicle
- 80G- donations to charitable institutions.
- 80GG-if your income does not include HRA component, you can claim rent deduction under 80GG
- Section 80TTA- deduction upto Rs 10,000 for interest received in saving bank account.
- Section 54 -54F – Capital gain exemption for capital gains