Tips to Pay Less Tax and Save More

Paying taxes is something that everyone dreads. Businesspeople, employees, self-employed people or professionals, everyone is on the hunt for finding ways to pay minimum tax. While it is illegal to evade tax in India, there are also several options where you can invest your hard-earned money and lessen your tax burden. 

For every type of vocation, the Indian tax system has some of the best investment plans, which are tax-free and can be availed to get maximum benefit. 

Below are some of the most popular tax exemption options that can help you make your own tax saving plan:

• The most common and popular tax saving investments come under Section 80C. This section covers expenses like children’s tuition fees, 5-year fixed bank deposit, National Pension Scheme, ELSS Funds, Medical insurance with claim deduction up to Rs. 25000, Public Provident Fund Principal amount repaid on Home Loan and the likes.
• Agricultural income is completely exempted from tax in India. The income generated from an agricultural land like rent, income from selling the agricultural products, farm building income are free from tax entirely.
• In India, there is no tax collected on something that you inherited. So any property or asset that you have received through a will is exempt from any kind of tax.
• If you have taken an education loan, then the interest that you pay on loan is expected from tax irrespective of the amount.
• Under Section 80G, contributions made as charity or donations to charitable institutions and donations made to political parties under Section 80GGC are 100% tax-free.
• In terms of a partnership firm, once the tax is collected from the total profit of the firm, partners are not taxed individually for the same income.
• Another popular tax exemption is the House Rent allowance. You can claim this allowance to save tax paid on your house rent.
• There is also a standard deduction up to Rs. 40000, which includes expenses such as daily travel, medical expenses, etc.
• All employees can either get their employees to pay their telephone and internet connection expenses or claim tax benefit for it.
• Under the Voluntary Retirement scheme, amount up to Rs. 5,00,000 is tax free.
• Interest up to Rs. 10000 on saving account for any account holder is tax-free.
• The amount received on maturity of any Life Insurance policy is tax-free if the premium paid does not exceed 20% of the assured sum for policies issued before April 2012. If the policy is issued after April 2012, then the amount received is tax-free only if the premium does not exceed 10% of the sum assured.
• Profits from stocks or mutual funds are tax-free up to Rs. 1,00,000

These were some of the popular tax-saving investments in the Indian tax system. These pointers can be used for maximum benefits from your hard-earned income.