Are you a salaried person?
Want to pay less tax?
Do you think you can avoid paying any tax?
Got tempted by the Title right?
Don’t worry. There’s no way you can do so.
But you can manage your taxes and reduce liability through proper planning.
- Start saving & investing in schemes which are allowable as deduction under Income Tax Act, 1961
- Maintain a record of medical bills of your senior citizen parents and pay them online in order to claim benefit of Rs. 50,000 u/s 80D
- Keep rent receipt and rent agreement for HRA benefit/80GG (only 1 out of 2 will be allowed).
- Buy Life insurance (upto 1,50,000 u/s 80C) and Health insurance (upto 50,000 u/s 80D) for yourself and your family
- Invest in NPS scheme where you can choose the risk of your portfolio and save Rs. 50,000 u/s 80CCD(1B)
- Invest in tax-saving(ELSS) MFs. But remember, this is also allowed u/s 80C and the overall limit is Rs.1.5 lakh only. Many taxpayers are of view that all MFs are tax saving. That’s not true. One should be vigilant before investing and should read the Scheme documents.
- If you have taken any Housing loan, ask the Bank for the Principal & interest bifurcation. Interest is claimable u/s 24b & 80EEA(for loans taken in FY 2019-20) and Principal is claimable u/s 80C.
- Negotiate with the employer for Flexi-Basket Allowances where you can decide part of your salary structure.
You can optimize your income tax deductions for salaried employees if you are careful.
There are income tax calculators available to help estimate the tax saving for salaried individuals.
You may think that Dept. wont bother about salaried persons and simply processes the returns using software without any objection. But once you are caught, your life would be like a hell and you wont have peace of mind. So, just go as per the provisions and plan accordingly.
Remember 1 thing. You can’t EVADE you can only PLAN & REDUCE. Its our responsibility.