Tax planning is always there on everybody’s radar. People always look out for avenues and ways for tax savings and deductions. So if you are one of those guys, then these Tax Savings Tips might be of help to you.
- Gifts received in the form of cash or cheque
If you have received presents/gifts in the form of cash or cheque in your marriage, then this entire gift amount is tax free.
- Income from interest on savings bank account not taxable up to Rs. 10,000
Interest income is not taxable up to Rs. 10,000. This means if you have earned say Rs. 12,000 during the year, then you have just pay tax on Rs. 2,000 only.
- Profit from selling shares or equity mutual funds not taxable if holding period is more than 12 months
There is a short term gain tax applicable if you earn profits from selling shares or equity mutual funds in less than 12 months from the purchase date.
- Money you’ve inherited
There is no inheritance tax in India. So anything you get from your deceased parents or relatives as per their legal will is fully exempt from tax.
- Bounty of options available to save Tax under section 80C
Under section 80 C, there is a maximum tax deduction up to Rs. 150,000 provided you invest in any one or multiple of the following:
- Life Insurance Premium (LIC, HDFC Life etc.)
- Public Provident Fund (PPF)
- National Savings Certificate (NSC)
- Equity Linked Savings Scheme (ELSS)
- Principal Amount Repaid on Home Loan
- 5 year fixed deposits with banks and post office
- Tuition fees paid for children’s education, up to a maximum of 2 children
- Tax saving on home loan under section 80C, section 24
Home loan offers you couple of options for tax savings/deductions. Firstly the principal amount repaid during the FY can be included in 80c, where you can claim a deduction of up to Rs 150,000. In addition to this you can claim deduction up to Rs 150,000 under Section 24.
Tax saving on education loan
Under Section 80E the interest paid on an education loan is fully non-taxable up to any amount. You can also claim this deduction if the education loan is taken for your spouse or children.