How do I save taxes in India 2022?

March 17, 2022

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gst and income tax, online tax filing services india

You must pay special attention to the various tax-saving financial solutions in India if you want to save a significant portion of your income. If you work as a salaried professional in India, you can save money on taxes by using sections 80C, 80CCC, and 80CCD. Tax Help Desk provides you the best GST and income tax-related consultation and it is also one of the best online tax filing services India.

Tips to save Taxes in India 2022

If you believe you have been paying a significant portion of your income in taxes, it is quite likely that you have not properly managed your taxes. You can save money on taxes in a number of methods that are legal. The Income Tax Act of India allows citizens to save money on taxes by deducting certain expenses. The deductions are available to claim when filing a tax return.

Investment

The foremost way for tax saving is through investing your hard-earned money into various tax-saving instruments. Here, you can avail of tax deductions up to Rs 1.5 lakh under Section 80C of the Income Tax Act. You can choose to invest in.

Employee Provident Fund (EPF)

For salaried employees, this is a retirement benefit plan. The employer deducts 12 percent of the basic wage and Dearness Allowance (DA) in this case. The money is subsequently put into government-approved provident fund plans.

Public Provident Fund (PPF)

These are government-backed ventures that have a 15-year minimum lock-in term. After 7 years, you can partially withdraw cash and earn an interest rate of roughly 8%.

Equity Linked Savings Scheme (ELSS)

These are tax-advantaged mutual fund schemes that offer both tax savings and strong market-linked returns. These have a three-year minimum lock-in duration.

Sukanya Samriddhi Account

This government-backed scheme allows you to invest up to Rs 1.5 lakh every year. You can open an account in your daughter’s name and earn interest of up to 8.5 percent as a parent of a girl kid.

Tax Saving Fixed Deposit

Traditional fixed deposits are comparable, however, these have a 5-year minimum lock-in duration. You can earn interest rates ranging from 7% to 9%.

National Saving Certificate (NSC)

These have a 5-year minimum lock-in term. The interest payment, which can be as high as 8%, is compounded annually.

National Pension Scheme (NPS)

This is a government-run social security service that provides retirement benefits to employees in the public, private, and unorganized sectors. There are two types of accounts: Tier I and Tier II. The former is a required account that permits funds to be withdrawn only after retirement.

Making Voluntary Donations

Donations can also help you save money on taxes. You can donate to several relief funds, including as the Prime Minister’s Relief Fund, funding to combat drug misuse, and the Clean Ganges Fund, or you can make voluntary contributions to recognized NGOs. Section 80G of the Internal Revenue Code exempts all of these donations from taxation.

Taking a Home Loan

Did you know that getting a house loan can help you save money on taxes? Payments for both interest and principal on your home loan are tax-free under Section 80C of the Internal Revenue Code.

Conclusion

You might ask your boss to arrange your income in a way that permits you to save money on taxes. House Rent Allowance (HRA), transportation, personality development, medical treatment, telephone, uniform, and workplace entertainment are some of these benefits. GST and income tax exemptions on your Leave Travel Allowance (LTA) are available twice every four years.

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