Saving tax is always at the forefront of each taxpayer’s mind. That is the reason individuals take a gander at legal avenues to bring down their tax liability. Thanks to the Income Tax Act arrangements, there are ways in which an individual tax-payer can bring down his tax outgo. The arrangements accommodate tax deductions and tax exceptions from the taxable income. These deductions and exceptions diminish your tax liability.
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In addition, the Condition of Financial plan also makes changes and modifications in the available deductions and exclusions. The current year’s Association Financial plan 2020 also made a major change by introducing the optional new tax system. It is, therefore, necessary to the primary check which tax system will be best suitable to you – Old tax system or New tax system.
In request to get more advantages, you ought to ideally be opting for the old tax system. Here are some helpful tax-saving tips for the Financial year 2020-21 to bring down your tax:-
Tax saving tips for FY 2020-21(if you Pick in the Old Tax System or On the off chance that you Select in the New Tax System you can not get any Exclusion from Income Tax Section with the exception of 80CCD)
Use the deductions available under Section 80C:- Section 80C is one of the most popular tax deduction sections which allow you sans tax investments and costs of up to Rs.1.5 lakhs. The popular instruments which qualify for Section 80C deductions include the following – (in the event that you Pick in the Old Tax System.)
Use Section 80C deduction. Make qualified investments and claim for the allowed consumption. ELSS investments and extra security expenses are the most popular go-to instruments for availing maximum 80C deductions. (On the off chance that you Select in the Old Tax System.)
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• Don’t forget to invest in a NPS:- Section 80CCD (1B) allows you an additional deduction of Rs.50, 000 on the off chance that you invest your income in the National Benefits Plan. In this way, investments in NPS fill you dual needs. You can claim an additional deduction and also plan for your retirement.
Purchase Health Insurance:- Section 80D of the Income Tax Act allows the charges paid for a health insurance strategy as qualified deductions from your taxable income. Thus, don’t overlook a health insurance plan. The plan would prove to be useful in meeting the financial costs of a medical contingency you and your family faces. Additionally, charges paid for self and family are allowed as a deduction from tax up to a maximum of Rs.25, 000. In this section that you also purchase a health plan for your senior citizen parents, you can claim an additional deduction of Rs.50, 000 making the total available deduction Rs.75, 000. (In the event that you Select in the Old Tax System.)
• Invest in your dream home:- Having your own home must be your dream. All things considered, for property holders, there is a tax-help too. While the principal repayments of a home loan are deducted under Section 80C, interest paid on the home loan qualifies for deduction under Section 24 of the Income Tax Act. Consequently, you can claim a tax deduction of up to Rs.2 lakhs on your home loan interest payments. (in the event that you Select in the Old Tax System.)
• Claim a deduction on your savings account interest earnings U/s 80TTA:- The Head administrator’s Jan Dhan Yojana conspire has made savings accounts popular among the Indian population. Other than having a banking account, your savings account also earns you interest. This interest earned, whenever restricted till Rs.10,000 in a financial year, is allowed as a tax deduction under Section 80TTA. In this way, on the off chance that you earned interest on your saving account, claim it as a deduction. (on the off chance that you Select in the Old Tax System.)
• In the event that you are a salaried worker, you can claim an additional standard deduction of Rs.50,000 from your salary income for the financial year 2020-21 (in the event that you Select in the Old Tax System.)
For senior residents, interest earned from fixed and mailing station stores, up to Rs.50, 000, are also allowed as without tax income. Taxpayers can also make donations to a charitable cause and earn deduction under Section 80G. (in the event that you Pick in the Old Tax System.)
Thus, these tax-saving tips would definitely help you in lowering your taxes in this financial year. Keep these tips handy and attempt to minimize your tax liability.