Income Tax can be defined as the amount of rupees government inflicts on an individual’s income. In other words, Income Tax is the amount to be paid on your income. The more you income, the more you have to offer. This income tax is habituated to reserve for government functions, for the betterment of the country, and also to provide several goods to the natives.
This works like the income method of the Government. Income tax can be classified into two types is Direct taxes, where you pay the taxes directly like income tax, corporate tax, and others, and one is, indirect tax where you pay the taxes indirectly like the grocery tax service tax, value-added tax, etc.
Before going further, you should be aware of saving Taxes. What is Tax Saving? Basically, tax saving is the procedure provided by the government where a salaried official or a self-employed person can save their taxes. For this, the government has provided Section 80 C of The Income Tax Act, 1961, where you are eligible to demand a deduction of Rs. 1,50,000 on your total income. Tax saving is very important for a person. The more you plan the finance properly, the more you will be free from tax liabilities, and also you can achieve your dream goals with the help of proper savings planning.
While talking about Tax Saving, Income Tax Saving Calculator strokes the mind first. The Income Tax saving calculator is just like a formula box where you can enter your total income, and the gross will be deducted under the criteria of 80C. You can then calculate the taxes falling under the tax slab. This works like the tool where you can keep an account of how much tax you have to pay and how much you can save from there. And this works like the investment planning tool.
As said earlier, according to section 80 C of the Income-tax Act, a withdrawal of Rs. 1.5 lakh of your total income can be claimed by you. In other words, if you are an individual or belong to the Hindu Undivided Family (HUF), then you can reduce up to Rs. 1,50,000 from your total taxable income. Income Tax saving Calculator, therefore, is a counterfeit of the taxes saved by a person with the help of Section 80 C tax deduction.
In the Income Tax Saving Calculator, Tax Saving is calculated on the basis of the Tax slab. Your taxable income is what you get after making the advanced taxes and TDS (Tax Deducted at Sources). Then that amount will be levy at the appropriate slab. Let us take an example if you are a citizen below 60 years old and fall under the grouping of individuals; then you can experience an income tax responsibility of Rs. 52,000. According to 80 C, the amount of taxes to be paid depends upon the tax brackets. But if you have not exploited section 80C, then an amount of Rs. 92,500 is what you have to confer. You can save Rs 49,500 by utilizing Section 80 C.
Income Tax-Saving Options
How to save Income Tax in India? There are several ways on how you can save income-tax in India. If you want to save your Income-tax, then you can dig into several schemes offered by several companies to get benefits on tax saving. There are Several Income Tax Saving Options to help you.
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Once you invest your money in the different schemes, the professionals of that scheme will manage your money and will provide you with the best results. Schemes like ELSS (Equity-Linked Savings Scheme) and NPS are quite demanding schemes. There are various ways in which you can enjoy this option. Apart from section 80C, Some of the mechanism is as follows:
- Tax-Saving with ELSS- Equity
Linked Saving Scheme is one of the best possible schemes that provide a high amount of return with the shortest period of three years. This scheme is considered as the effective income-tax saving option very and offers easy ways to handle if you have a KYC accusation. Invesco India you thinking to invest a huge amount in this equity firm, then the risk factor can be high. But investing a small amount can be a good idea as ELSS are very tax-friendly, giving 10% long-term capital gains. Some best performing ELSS Tax saver funds are:
- Mirae Asset Tax saver giving returns (%) of 13.49 in 3 years and 21.62 in 5 years.
- Canara Robeco Equity Tax saver giving returns (%) of 16.09 in 3 years and 16.99 in 5 years.
- Axis Long term Equity giving returns (%) of 13.57 in 3 years and 16.58 in 5 years.
- Invesco India Tax is giving a return of (%) 11.04 in 3 years and 16.19 in 5 years.
- NPS Tax saving scheme
National Pension Scheme is another effective and highly demanded income-tax saving option. It works with three separate divisions. One is they follow Section 80 C of Tax saver and the second method is a deduction of 50,000 under Sec 80CCD(1b). Lastly, the third method is if a person contributes 10% of his salary in the NPS scheme, then the amount is tax-free under Section 80CCD(2).To make you understand more giving data on how NPS has worked:
- Equity funds giving returns (%) of 9.62 in three years and 14.27 in 5 years.
- Corporate bond funds giving returns (%) of 9.99 in 3 years and 9.77 in 5 years.
- Gilt funds are giving returns (%) of 11.71 in three years and 10.81 in 5 years.
- Alternative Investment Funds giving returns (%) of 8.24 in 3 years.
- PPF Tax Saving
Public Provident Funds are the best place for income-tax saving option. These funds are a little bit time-consuming but give a high rate of interest. The first holding of this scheme is for 15 years and later if you want you can extend up to 5 years. These are the easiest way to invest just by opening an account in Post Office or PSU Banks.
- Medical Expenses Tax Saving scheme
For Income-tax saving option medical sector can play a vital role. Under Section 80DD, if a taxpayer is disabled, then you can claim a deduction of toll. There are specific disabilities that fall under this scheme like blindness, mental illness, retardation of mind, hearing disability, low vision sites, autism, Cerebral palsy, and locomotors disability, etc.
- Home loan tax saving scheme
Under section 80C, a principal portion of the loan can be demanded of 1.50,000 and also be deducted from the income from home property. Under Section 80EE, the owners can claim Rs. 50,000, but there are some criteria to avail of this deduction. If you are demanding the deduction, then your house has to be less than 50 lakhs, then you will get a loan of Rs. 35 lakh or less. This is another highly rated income-tax saving option.
How can you save your Income Tax in India?
You can save your Income Tax by several measures as the income-tax saving option is vast, so it can really confuse you on how you can save your income-tax in India. One of the famous measures is Section 80C of the Income Tax Act, as mentioned earlier. You can also avail of special schemes to save your Income Tax. There are Various Tax Saving Mutual Funds provided by Indian’s leading companies to help you to save your Income Tax in India. Also, you can check income-tax saving options and tax-saving option salaried 2020-21. Some of the tax-saving schemes in India are:
Senior Citizen Saving Scheme
National Pension Scheme
Life Insurance Scheme
Various Nation Fixed Deposits
What are the Tax Saving Options for Salaried 2020-2021?
You have already come to know that there are varieties of schemes that will help you to save your Income Tax, but you are not sure whether these schemes are going to help you in 2020-2021. Tax saving options for salaried 2020-21 has been a tragic period in our history, and unlike you, everyone is tensed to invest in any scheme. You should always check the tax-saving tips and should always try to increase your saving habits. Listing down below some of the tips that will help you to save your salaried tax in 2020-2021:
Try to Invest in ELSS (Equity-Linked Saving Scheme)
Try to Invest in National Pension Scheme
Try to contribute in Sukanya Samriddhi Yojna
Always look for the New Tax regime
Try to Invest in Fixed Deposit provided by the Post Office
Try to invest in Health Insurance
Try to secure money for the future
Allow agencies to look after your money and get expert advice
By following the above-mentioned directive, you can definitely save your amount of Income Tax. But always be very careful before investing in any plan. Try to discuss it with the executive heads for your better understanding. And never forget to give the tax because it works like the backbone of the government. Always try to save the maximum with a proper plan.
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