Taxpayers are keen to pay the government as little as possible out of their wages, and to do so; some are willing to travel down the wrong path. They want to keep themselves full, whether legally or illegally. Before doing anything illegal or unnecessary, folks should know one interesting fact. Individuals in many other nations pay more than half of their incomes in taxes, but they receive protection and benefits in exchange.
India ranks one of the top ten countries regarding residents paying corporate taxes. The country’s tax to GDP ratio is comparatively low compared to other countries. It is because a considerable portion of the population is exempt from taxation. Those that fly under the radar also pay a little in taxes. Section 24 of the income tax act, grants you more access to the income tax. There are numerous legal ways to save taxes. Amit Gupta, MD of SAG Infotech, has offered eight legal techniques to avoid taxes.
Donation and charitable giving
The government encourages taxpayers to make charitable contributions to assist the impoverished and needy. Donations to the PM Relief Fund or any notified NGO or political party may qualify for a full tax deduction under Section 80G of the Internal Revenue Code.
Furthermore, according to a recent change to the Act, donations of government monies to the Swachh Bharat Kosh, the Clean Ganga Fund, and the National Fund for the Control of Drug Abuse can now be deducted in full.
Make plans for a home loan
Repayment of principal and interest on a house loan can save you a significant amount of tax. Section 80C grants you to claim a deduction for principal compensation on an existing home loan. You can also deduct up to Rs 2 lakh in interest payments on your house loan. However, the home loan must be substantial to yield the maximum benefits.
Save on Education Loan Taxes
There is a complete tax exemption available for student loan interest repayment. While there is no limit to the deductible amount, a refund of the principal amount is not excused, unlike a home loan. Consult with someone who knows investment banking to receive the most tax savings from your student loan.
Display your spending
Not all personal spending can help you save money on taxes. Some personal expenses are listed below to qualify you for other tax breaks.
- Tuition for oneself and one’s children
- Insurance premiums for oneself, one’s spouse, or one’s children
- Expenses for treating some diseases
- Medical care for dependents who are disabled
Consult a professional or a CA for additional information. They can assist you more effectively because of their knowledge and experience.
Consider long-term capital gains while devising a tax-saving strategy
You may be excluded from capital gains tax if you sell a long-term asset and reinvest the gain in designated instruments. However, for an asset to be deemed a long-term asset, you must own it for more than three years. Long-term profits from equities shares or mutual funds that you have held for at least a year are tax-free. This is how you can save your income tax. To know more about, itr acknowledgement download, click here.