Although everyone has income tax to pay, the good news is that there are several approaches to get personal tax relief. If you make sensible plans, you can yearly save a respectable sum of money. Let’s examine how you might easily and legally lower your tax load.
Personal tax relief: what is it?
Personal tax relief is the process of lowering your income tax payable load. This relief provided by the government motivates individuals to save and invest. Several Income Tax Act provisions let it underlie.
Common Methods of Obtaining Personal Tax Relief
One can save taxes in several ways. The most often occurring and simple ones are these:
Section 80C: Save at least 1.5 lakh
Investing in life insurance premiums entitrates you deductions.
- Worker Provident Fund (EPF)
- Public Provident Fund, or PPF
- Mutual ELSS funds
- Fixed deposits meant for tax savings
- Children’s tuition rates
2. Section 80D, Health Insurance
You can claim: for your family’s and your own health insurance up to ₹25,000.
For parents’ health insurance, an additional ₹25,000 (or ₹50,000 should parents be senior citizens)
Section 24 and 80EE addresses home loans.
Interest on a home loan under Section 24 could run up to ₹2 lakh.
Extra advantages under Section 80EE for first-time home purchasers
Section 80E – Education Loan
Should you be returning an education loan for your children or yourself, you can write off interest paid.
Section 80G deals with donations.
Here also is personal tax relief if you donate to specific charities, temples, or relief funds.
Old vs New Tax System
India today features two tax systems:
- The old government: You could get personal tax relief and claim deductions.
- New rule: lower taxes but less deductions
Go for the one that saves more for you. Determine using the income tax calculator.
Advice on Receiving Optimal Personal Tax Relief
- Plan starting at the end of the financial year.
- Store all of your investment documentation securely.
- Steer clear of hurried decisions at last-minute.
- Invest not only to save taxes; also, choose the correct paths for your future.
Closing Notes
Unlike what it sounds, obtaining personal tax relief is not difficult. Little planning will help you save money and concurrently increase your wealth. Every rupee saved in tax can be used for your dreams—that of travel, education, or house purchase.
