7 Ways Salaried Individuals Can Save Tax
Individuals having gross total income exceeding the taxable limit must file an individual online income tax return after online income tax payment on or before the ITR due date. Income tax return filing procedure is online and you should file your individual income tax return on or before the ITR due date to avoid penalty.
Better tax planning before filing your individual income tax return allows you to make the best use of the various tax exemptions, deductions, and allowances available under the Income Tax Act, 1961. As the financial year, 2018-19 is going to end soon, taxpayers including salaried individuals have started thinking about their expected online income tax payment liability and ways to save tax for ITR filing.
7 Ways Salaried Individuals Can Save Tax:
There are many ways that can help you to save tax for filing your individual income tax return on or before the ITR due date. We are providing 7 ways by which salaried individuals can save tax or reduce their online income tax payment liability:
1. Standard Deduction: Standard deduction of ₹ 50000/- is available to a salaried employee.
2. House Rent Allowance: A salaried employee having rented accommodation can get the benefit of HRA. The least of the following is allowed as the HRA exemption:
- Total HRA received
- Rent paid less 10 percent of (Basic salary +DA)
- 40 percent of salary (Basic + DA) for non-metro cities and 50 percent of salary (Basic + DA) for metro cities
3. Leave Travel Allowance: A salaried employee can also get the benefit of LTA, restricted to travel expenses incurred by such employee. LTA is allowable only for two travels in a block of four years.
4. Interest On A Home Loan: Homeowners can claim up to ₹ 2 lakhs as a deduction for interest on home loan for the self-occupied property and deduction for entire interest on home loan for the let out property.
An additional deduction of ₹ 50,000 on interest on the home loan is also available provided, the loan must not be for more than ₹ 35 lakhs and the value of the property must not be more than ₹ 50 lakhs. And, the individual must not have any other property registered under his name at the time the loan is sanctioned.
5. Deductions Under Section 80C, 80CCC And 80CCD(1): Some of which are eligible for an exemption under Section 80C, 80CCC and 80CCD(1) up to a maximum of ₹ 1.5 lakhs are:
- Life insurance premium
- Equity Linked Savings Scheme (ELSS)
- Employee Provident Fund
- Annuity/ Pension Schemes
- Tuition fees
- Payment made towards the principal amount of housing loans
- Fixed Deposit
- Deposit in Post Office
- Contribution to PPF Account
- The amount deposited in Sukanya Samridhi Account
- National Saving Certificate
- National Pension Scheme
6. Deduction UNDER Section 80d: Under Section 80D deduction of ₹ 25,000 is available for insurance of self, spouse and dependent children. An additional deduction for insurance of parents is available for ₹ 25,000 if the parents are 60 years old or less than 60 years old and ₹ 50,000 if the parents are more than 60 years old. In case, a taxpayers age and parents age is 60 years or above, the maximum deduction available under this section is to the extent of ₹ 100,000.
7. Deduction under Section 80TTA: Under section 80TTA maximum deduction of ₹ 10,000 is available to Individuals and HUFs on income from bank interest. In case the income from bank interest is less than ₹ 10,000, the whole amount will be allowed as a deduction.
The above mentioned are the 7 ways by which salaried individuals can save tax or reduce their online income tax payment liability by filing return within the ITR due date. To understand in detail you can also consult professionals like CA as they have complete information about the individual income tax return, ITR filing procedure, online income tax payment, ITR due date. To find authentic & verified professionals for online ITR filing you can take help of CAONWEB online directory.