How to save tax for salaried employees in india?

jigarbhatt271

jigarbhatt271

KF Rookie
Annual Income: INR 22,00,000
Interest on Housing Loan: 78,898
PPF: 150000
My Mediclaim Premium: 13,007.00
Mother Mediclaim Premium: 21,909.00
NPS: 50,000

Please Please Please advice on it. I am paying 3,75,000 tax per anum that is very huge amount for me.

Note: If anyone can help me to reduce my tax, I can pay for it.
 
Last edited:
J

Janhavi Ghate

KF Rookie
There are several ways salaried employees in India can save on taxes:

1. **Investment in Provident Fund (PF)**: Contributions to the Employee Provident Fund (EPF) are eligible for tax deductions under Section 80C of the Income Tax Act.

2. **Public Provident Fund (PPF)**: Investing in PPF is also eligible for tax deductions under Section 80C.

3. **Equity Linked Savings Schemes (ELSS)**: ELSS mutual funds offer tax benefits under Section 80C and have the potential for higher returns compared to traditional tax-saving instruments.

4. **National Pension System (NPS)**: Contributions to NPS qualify for tax deductions under Section 80CCD(1) along with an additional deduction of up to ₹50,000 under Section 80CCD(1B).

5. **Health Insurance Premiums**: Premiums paid for health insurance policies for self, spouse, children, and parents are eligible for deductions under Section 80D.

6. **House Rent Allowance (HRA)**: If HRA is part of your salary, you can claim tax benefits based on the HRA received and rent paid, subject to certain conditions.

7. **Home Loan Interest**: Interest paid on a home loan is eligible for tax deductions under Section 24(b) of the Income Tax Act.

8. **Education Loan Interest**: Interest paid on education loans for self, spouse, children, or for whom the individual is a legal guardian is eligible for tax deductions under Section 80E.

9. **Donations**: Donations made to eligible charitable institutions or specified funds are eligible for tax deductions under Section 80G.

10. **Savings Account Interest**: Interest earned on savings account deposits up to ₹10,000 in a financial year is eligible for deductions under Section 80TTA.
 
jigarbhatt271

jigarbhatt271

KF Rookie
Janhavi Ghate said:
There are several ways salaried employees in India can save on taxes:

1. **Investment in Provident Fund (PF)**: Contributions to the Employee Provident Fund (EPF) are eligible for tax deductions under Section 80C of the Income Tax Act.

2. **Public Provident Fund (PPF)**: Investing in PPF is also eligible for tax deductions under Section 80C.

3. **Equity Linked Savings Schemes (ELSS)**: ELSS mutual funds offer tax benefits under Section 80C and have the potential for higher returns compared to traditional tax-saving instruments.

4. **National Pension System (NPS)**: Contributions to NPS qualify for tax deductions under Section 80CCD(1) along with an additional deduction of up to ₹50,000 under Section 80CCD(1B).

5. **Health Insurance Premiums**: Premiums paid for health insurance policies for self, spouse, children, and parents are eligible for deductions under Section 80D.

6. **House Rent Allowance (HRA)**: If HRA is part of your salary, you can claim tax benefits based on the HRA received and rent paid, subject to certain conditions.

7. **Home Loan Interest**: Interest paid on a home loan is eligible for tax deductions under Section 24(b) of the Income Tax Act.

8. **Education Loan Interest**: Interest paid on education loans for self, spouse, children, or for whom the individual is a legal guardian is eligible for tax deductions under Section 80E.

9. **Donations**: Donations made to eligible charitable institutions or specified funds are eligible for tax deductions under Section 80G.

10. **Savings Account Interest**: Interest earned on savings account deposits up to ₹10,000 in a financial year is eligible for deductions under Section 80TTA.
Click to expand...
Thanks for the update but I am following almost all the points but still I have to pay this much amount of tax :(
 
zacobite

zacobite

KF Mentor
jigarbhatt271 said:
Annual Income: INR 22,00,000
Interest on Housing Loan: 78,898
PPF: 150000
My Mediclaim Premium: 13,007.00
Mother Mediclaim Premium: 21,909.00
NPS: 50,000

Please Please Please advice on it. I am paying 3,75,000 tax per anum that is very huge amount for me.

Note: If anyone can help me to reduce my tax, I can pay for it.
Click to expand...
DM Me
 
jigarbhatt271

jigarbhatt271

KF Rookie
zacobite said:
DM Me
Click to expand...

Annual Income: INR 22,00,000
Interest on Housing Loan: 78,898 (total amount remainng is 7.5 lakhs)
Self - PPF: 150000
Wife - PPF: 150000
Daughter - Sukanya samrudhi - 150000
My family Mediclaim Premium: 13,007.00
Parents Mediclaim Premium: 21,909.00
NPS: 50,000
Term plan : yearly 16060 premium
Direct mutual fund and stock market investment
Invest in Fd with the name of my wife
LIC policy with premium of
1) 51,000 2) self-11550 3) wife-11550
 
zacobite

zacobite

KF Mentor
jigarbhatt271 said:
Annual Income: INR 22,00,000
Interest on Housing Loan: 78,898 (total amount remainng is 7.5 lakhs)
Self - PPF: 150000
Wife - PPF: 150000
Daughter - Sukanya samrudhi - 150000
My family Mediclaim Premium: 13,007.00
Parents Mediclaim Premium: 21,909.00
NPS: 50,000
Term plan : yearly 16060 premium
Direct mutual fund and stock market investment
Invest in Fd with the name of my wife
LIC policy with premium of
1) 51,000 2) self-11550 3) wife-11550
Click to expand...
all the best
 
J

Janhavi Ghate

KF Rookie
If you've already optimized your tax-saving investments and expenses but still find yourself with a significant tax liability, consider the following additional strategies:

1. **Review Salary Components**: Ensure that you're fully utilizing all the tax-saving components of your salary, such as HRA, LTA (Leave Travel Allowance), and other reimbursements.

2. **Maximize Section 80C Limit**: Make sure you're utilizing the entire limit of ₹1.5 lakh available under Section 80C by exploring additional options like NPS, ELSS, or other eligible investments.

3. **Explore Other Deductions**: Look into other deductions available beyond Section 80C, such as Section 80D (health insurance premiums), Section 80E (education loan interest), and Section 80TTA (savings account interest), to see if there are any opportunities you may have missed.

4. **Tax-Free Allowances**: Take advantage of tax-free allowances provided by your employer, such as meal coupons, mobile phone reimbursements, or other allowances that may not be fully utilized.

5. **Tax Planning**: Consider long-term tax planning strategies, such as spreading out certain investments or expenses over multiple years to optimize tax benefits.

6. **Consult a Tax Advisor**: If you're still unsure about how to minimize your tax liability, consider seeking advice from a tax advisor who can provide personalized recommendations based on your specific financial situation and goals. They may be able to identify additional strategies or tax-saving opportunities that you haven't
jigarbhatt271 said:
Thanks for the update but I am following almost all the points but still I have to pay this much amount of tax :(
Click to expand...

considered.
 
G

guptajoy961

KF Expert
jigarbhatt271 said:
Annual Income: INR 22,00,000
Interest on Housing Loan: 78,898
PPF: 150000
My Mediclaim Premium: 13,007.00
Mother Mediclaim Premium: 21,909.00
NPS: 50,000

Please Please Please advice on it. I am paying 3,75,000 tax per anum that is very huge amount for me.

Note: If anyone can help me to reduce my tax, I can pay for it.
Click to expand...
Hey there! I've been looking at your finances, and I've found a few ways you can potentially save some money on taxes. Here are some strategies you might want to consider:
  1. Housing Loan Interest Deduction:
You can save up to ₹2 lakhs on taxes by claiming a deduction on the interest paid for your housing loan. Make sure you're taking full advantage of this!
  1. Public Provident Fund (PPF) Contribution:
That ₹1,50,000 you're putting into your PPF account every year can be deducted from your taxable income under Section 80C. This could help you save a good chunk of money on taxes.
  1. National Pension System (NPS) Contribution:
Similarly, the ₹50,000 you're contributing to your NPS account can also be deducted from your taxable income, up to ₹50,000 under Section 80CCD(1B).
  1. Medical Insurance Premiums:
The ₹13,007 you're paying for your Mediclaim policy and the ₹21,909 for your mom's policy can be deducted under Section 80D, up to ₹25,000 each.
  1. Other Deductions:
There are a few more potential tax-saving options you could look into, such as Section 80C (tax-saving investments), Section 80G (charitable donations), and Section 80TTA (interest earned on savings accounts).
By using these strategies, you could potentially save quite a bit on taxes. Of course, it's always a good idea to talk to a tax professional to make sure you're taking advantage of all the deductions and exemptions you're eligible for.
 
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