Save Taxes Like a Pro!
Blunders
Waiting until March to start tax planning
Thinking the only way to save on taxes is by investing
Investing in insurance products that mix insurance and investment
Borrowing money to invest
Focusing mostly on bank savings and fixed deposits for investments
Trying to hide income from the tax department
Buying Investment Plans In Family Member’s Name
Best Practices
Savings should be made on a monthly basis or, if permitted, at the beginning of the financial year
Maintain separate PANs for personal and business purposes like (HUF, partnership, private limited)
Invest your hard earned money, based on your goal and risk taking ability, not just for tax savings
Consider donating at your will rather than for savings taxes
Check what tax regime is best for you, and file your ITR accordingly
Tax Slab
Tax Rate
Up to ₹ 2,50,000
Nil
₹ 2,50,001 - ₹ 5,00,000
5%
₹ 5,00,001 - ₹ 10,00,000
20%
Above ₹ 10,00,000
30%
Tax Slab
Tax Rate
Up to ₹ 3,00,000
Nil
₹ 3,00,001 - ₹ 7,00,000
5%
₹ 7,00,001 - ₹ 10,00,000
10%
₹ 10,00,001 - ₹ 12,00,000
15%
₹ 12,00,001 - ₹ 15,00,000
20%
Above ₹ 15,00,000
30%
Tax on salary components
Home Loan Benefits
Principal
80C
₹ 1,50,000
Interest
u/s 24B
₹ 2,00,000*
Interest on home improvement loan
u/s 24
within 2lac but capped at 30k
HRA Benefits
HRA is part of salary
HRA is not part of Salary
Basic
₹ 5,000 per month
Actual HRA received
25% of annual income
Actual rent paid - 10% of basic
Actual rent paid - 10% of annual income
Section 80C
the maximum deduction is 1,50,000
Expenditures
Tuition fees for 2 children
Stamp duty and registration cost of the house
Principal payment on home loan
Compulsory deduction
Employee Provident Fund / Voluntry Provident Fund
Central Govt. Employees Pension Scheme
Investment in debt
Public Provident Fund
Sukanya Samriddhi Yojana
National Savings Certificate
Senior Citizen Savings Scheme
Tax saving FD (for 5 year)
Other Investments
Life insurance premium
Mutual funds (tax saving)
National Pension System
Section 80D
Health Insurance Premium
| PARTICULARS | DEDUCTION FOR SELF & FAMILY | DEDUCTION FOR FAMILY | TOTAL DEDUCTION |
|---|---|---|---|
| For self and family only (age below 60 yrs) | ₹ 25,000 | ₹ 25,000 | |
| For self (family) & parents (both below 60 yrs) | ₹ 25,000 | ₹ 25,000 | ₹ 50,000 |
| For self (below 60) & parents (above 60 yrs) | ₹ 25,000 | ₹ 50,000 | ₹ 75,000 |
| For self & parents (both above 60) | ₹ 50,000 | ₹ 50,000 | ₹ 100,000 |
severe disability (80%+) ₹ 1.25 L
Other deductions
National Pension Scheme
| TAX BREAK | SECTION | MAXIMUM LIMIT |
|---|---|---|
| Own contribution | 80 CCD(1) | ₹ 1,50,000* |
| Additional contribution | 80 CCD(1B) | ₹ 50,000 |
| Employer’s contribution | 80 CCD(2) | 10% of Basic salary ^ |
^ Basic plus dearness allowance
| SECTION | DETAILS | LIMIT |
|---|---|---|
| 80E | Education loan interest 8 years its available | No limit |
| 80EEB | Auto loan interest on electric vehicle | ₹ 1,50,000 |
| 80TTA | Interest received in Saving Account | ₹ 10,000 |
| 80TTB | Interest Income for Senior Citizens | ₹ 50,000 |
| 80 G | Donation to certain charitable funds, charitable institutions, etc. | 100% tax deduction and 50% tax deduction For most - there is a limit of 10% of gross income |
| 80GGA | Donations for scientific research or rural development | 100% tax deduction |
| 80GGC | Donation to political parties | 100% tax deduction |