How can I reduce my taxable income in India?

Posted on by David Darling

How can I reduce my taxable income in India?

32 Easy Ways to Save Income Tax in 2021

  1. Tax Deduction In Case of Availing A Home Loan:
  2. Income Through Savings Account Interest:
  3. Income Through NRE Account Interest:
  4. Money Received from Life Insurance Policy:
  5. Scholarship for Education:
  6. Amount Received From Sold Shares or Sold Equity Mutual Funds:

Which investment is best for tax saving?

Sr No. Tax Saving Investment Options Tax Benefit Under Section
1 Life Insurance Section 80C (Premium) Section 10(D) (Death / Maturity)
2 Pension Plans Section 80CCC(sub-section under Section 80C)
3 Health insurance or Mediclaim Section 80D
4 NPS Section 80CCD

Which investments are tax free in India?

Listed below are tax free investments that meet a variety of needs and financial goals:

  • Life Insurance. Rs. 1,50,000 (Rs 1.5 lakhs)
  • PPF (Public Provident Fund) Rs. 1,50,000 (Rs 1.5 lakhs)
  • NPS (New Pension Scheme) Rs. 1,50,000 (Rs 1.5 lakhs)
  • Pension. Rs. 1,50,000 (Rs 1.5 lakhs)
  • Life Insurance. Rs. 1,50,000 (Rs 1.5 lakhs)

Can we save more than 1.5 lakh tax?

The most popular tax-saving options available to individuals and HUFs in India are under Section 80C of the Income Tax Act, Section 80C includes various investments and expenses you can claim deductions on – up to the limit of Rs. 1.5 lakh in a financial year.

How can I save tax if I earn 10 lakhs?

How to Save Tax for a Salary Above Rs 10 Lakhs?

  1. Reduce Your Taxable Income by Up To Rs 1.5 Lakhs (Section 80C, 80CCC, 80CCD)
  2. Additional Reduction of Up To Rs 50,000 for NPS Investors (Section 80CCD.
  3. Reduce Your Taxable Income by Up To Rs 75,000 (Section 80D)
  4. Reduce Your Taxable Income by Up To Rs 2 lakhs (Section 24)

Is Fd a tax saver?

A tax-saving fixed deposit (FD) account is a type of fixed deposit account that offers a tax deduction under Section 80C of the Income Tax Act, 1961. Any investor can claim a deduction of a maximum of Rs. 1.5 lakh per annum by investing in a tax-saving fixed deposit account.

Is 5 year FD tax-free?

One can claim an income tax deduction by investing money in a five-year FD scheme under Section 80C of the Income Tax Act, 1961. The features, benefits, and terms associated with this type of account may not be completely the same as the normal FD accounts.

Is NPS tax-free?

Employees contributing to NPS are eligible for following tax benefits on their own contribution: a) Tax deduction up to 10% of salary (Basic + DA) under section 80 CCD(1) within the overall ceiling of Rs. 1.50 lakh under Sec 80 CCE.

How can I make tax zero?

Suggestion to Consider for making Income Tax Zero when Income is Rs 20.41 Lakhs Per Annum

  1. Include all those components that are tax-free.
  2. For availing most of the benefits or HRA, HRA should be ideally 50% of the Basic Salary (40% HRA if an individual has rented a house in a non-metro)

Are 5 years FD tax free?

Tax-saving FD allows you to make an investment to save tax under section 80C of the Income Tax Act. The minimum tenure for a term deposit under Tax Saving Scheme is 5 years. You can get a tax exemption of a maximum of Rs. 1.5 lakh.

How can I save tax if I earn 8.5 lakhs?

If you earn an annual salary up to Rs. 7.75 lakh, here’s how you can pay zero tax

  1. Highlights.
  2. People earning up to Rs. 5 lakh are now exempt from paying tax.
  3. Salaried individuals earning up to Rs. 7.75 lakh can also pay zero tax.
  4. To reduce taxable income to Rs. 5 lakh, invest fully in Sections 80C, 80D, 80CCD(1B), 80TTA.

What is SBI tax saving scheme?

The SBI Tax Savings Scheme provides tax benefits under Section 80C of the Income Tax Act, allowing for a tax deduction of up to Rs. 1.5 lakh per annum. Term Deposit (TD) and Special Term Deposit (STD) are the two types of accounts available under the SBI Tax Savings Scheme.

Is PPF interest taxable?

As per provisions of section 10(11) of the I-T Act, interest accrued in PPF account where annual contribution does not exceed ₹5 lakh shall not be taxable.

Which are the best tax free investments in India?

Small savings schemes will continue earning low returns

  • Senior citizen savings scheme and post office monthly income scheme are still earning decent returns
  • GoI Saving Bonds are offering highest interest in fixed income options
  • Retired individuals in 30% tax bracket have option to invest in tax-free bonds

    • Which is the best tax saving instrument in India?

    – Life Insurance Premium – primarily this is for Life Insurance but they do give some returns. It is dvisable to treat this as Insurance and not Investment. – Public Provident Fund – One of the safest investment options with minimum risk. – Sukanya Samrudhi Yojana – It is gives pretty decent returns on investment mad

    What are the tax saving schemes in India?

    Senior Citizen Savings Scheme (SCSS)- 7.4 percent.

  • Sukanya Samriddhi Yojana Scheme (SSYS)- 7.6 percent.
  • Kisan Vikas Patra (KVP)- 6.9 percent.
  • Public Provident Fund (PPF) – 7.1 percent.
  • National Savings Certificates (NSC)- 6.8 percent.
  • Post Office Monthly Income Scheme (MIS)- 6.6 percent.

    • Which is the best tax saving investment?

    Only the salaried persons can make an investment in the VPF.

  • A maximum of 100% of the basic and DA is allowed to contribute.
  • The interest rate is the same as EPF.
  • Maturity returns are tax-free.
  • The tax benefit is subject to a minimum lock-in period of 5 years which means an employee has to make a continues contribution for minimum of 5 years.