In order to save tax, we must all engage in tax-saving schemes such as National Pension System (NPS), Public Provident Fund (PPF), Savings Account Certificate (NSC), and so on. People are always looking for methods to save money on their taxes. Nobody wants to pass up opportunities to save money on taxes. Different folks choose different approaches. Sometimes they simply adhere to the procedures they are familiar with, and as a result, they lose out on more effective ways of saving on tax.
Aside from these, there are various more solutions that might assist us in minimising our tax bill without requiring any investment. As a result, if you don’t want to make any further investments, you can employ these tax-saving plans and solutions.
- Consider taking home loans
Taking out a home loan is one of the finest methods to save money on taxes. It is one of the most prominent tax-saving plans that people opt for. It offers a number of deductions. Normally, one can subtract up to Rs 1.5 lakh from the principal repayment of a house loan under Section 80C and up to Rs 2 lakh from the interest payments under Section 24B.
The eligibility for the extra interest of Rs 1.5 lakh on the acquisition of a new house under the affordable housing plan under Section 80 EEA has been extended until March 31, 2022.
- Medical Expense Deductions
Section 80D permits you to subtract premiums paid for health insurance coverage for yourself, your spouse, minor children, and dependent parents. You should obtain health insurance for everybody in the family, although if they don’t, you may claim reimbursements for preventative health check-ups up to Rs 5,000.
- Children’s fee deduction is one of the tax-saving schemes
Expenses for our children’s schooling take a significant chunk of our money. As a result, maximising the tax benefits associated with these charges makes a lot of sense. Section 80C allows parents to claim a tax deduction of up to Rs 1.5 lakh for tuition fees paid for their children’s education. Please keep in mind that this benefit applies to every full-time education program provided by any licensed institution, including schools, universities, and even pre-schools and nurseries. This does not apply to tuition fees paid for up to two children per taxpayer.
- NRE account interest payment
Non-resident Indians hold NRE accounts in India and earn interest in them. They receive interest on the accumulated funds as well as the funds invested as a fixed deposit. Because of the Indian government’s generosity to NRIs, such a sum is not taxed. The interest amount is referred to only as tax-free earnings.
These are some of the ways that you can implement for saving tax this upcoming year. These are the most prominent and reliable sources that people opt for.