Income tax is one of the most dreaded taxes for the people of India and they look for ways to save on it. Though many people indulge in wrongful means for the same, it can fetch dire consequences. Instead, it is viable to look for legal ways to have to pay the lowest of taxes without inviting any legal implications. If a person does proper planning and uses various tax deductions in the right manner, he can do it same easily.
Here are 10 legal ways to save income tax in India:
1. Section 80 C
A discount of as much as Rs 100000 can be availed by making use of section 80C. This can be done by making healthy investments in options like life insurance, National Saving Certificates, Public Provident Funds and Equity Linked Saving Scheme. Other ways in which this section can be applied is by taking up bank fixed deposits for 5 years and education fees of children, maximum of 2 in number.
2. Sections 80 D and 80 G
In addition to section 80C, you can save on your income tax in India with the help of Section 80 D and Section 80G. While Section 80D enables you to get a deduction of Rs 15000 for medical insurance of self, partner or children and that of Rs 20000 for medical insurance of parents over 65 years of age, section 80 G entitles you to tax deduction on contribution to specific funds as well as charitable services.
3. Home Loans
Making the use of home loans in a proper manner is another legal way to save income tax in the country. The tax payer is given the option to claim a deduction up to Rs 100000 and Rs 150000 as interest rate under section 24.
4. Education Loan under section 80G
If you have procured an education loan, you can get a legal deduction under Section 80 G. The loan may have been taken for higher education purposes of the taxpayer himself, his spouse or children. It is granted on the repayment of the interest rather than that of the loan amount. It applies only to individuals and has no limit related to it.
5. Savings under senior citizen schemes
Senior citizens can benefit from making deposits in saving schemes which have been specifically designed for them. They not only help save income tax in a legal way but also provide high return of 9.2% pa. The interest can be availed on a quarterly basis.