Paying Income tax on a hard-earned salary is challenging at the end of the financial year for every one of us. Our income gets taxed in a few different ways: at the state and government levels, by Medicare, and social security, to name a few. Even there is a ton of hustle at the hour of submitting different insurance forms and rent receipts. In any case, on the off chance that you need, you can save yourself from pointless financial pressure and can save a good amount on taxes. Despite the fact that taxes are hard to dodge, there are various procedures to help ward them off. To get clear insights into tax saving, you need to understand tax slabs too. In the event that you are likewise searching for tax-saving options at that point, you can contribute your fund and can utilize it as a saving instrument in the future as well. Besides, you can likewise utilize various deductions to save taxes.
Different Ways to Save Income Tax for Assessment Year 2020-21
Here are the different ways to shield your income from taxes.
Contribute to the National Pension Scheme (NPS)
Probably the most ideal approach to save tax is only contributing some amount to NPS. There is a deduction accessible under Section 80CCD up to Rs 50,000 for contributions to the NPS. This contribution helps you to invest in equity and debt pension funds with the goal that you can fabricate a retirement corpus. Later this amount can be pulled back at the age of 60.
Secure some amount for future
Interests received on saving accounts are tax-free up to Rs 10,000 every year which falls under Section 80TTA. This cutoff is decided by Rs 50,000 for senior residents for FD just as a saving account interest that falls under Section 80TTB.
National Saving Certificate
A National Savings Certificate comes with a fixed rate of interest and has a duration of 5 years. The interest received on NSC is considered as an option to save tax and up to Rs 1.5 lakh can be considered as a rebate under section 80C.
Contribution to Charitable Institutions
Being humans we are here to help one another, contributions made to a charitable trust or relief funds are deductible under Section 80G. In any case, you need to remember that all the deductions are not covered under Section 80G.
Public Provident Fund (PPF)
Public Provident Fund is likewise a decent choice to save on Income tax. It is a savings scheme established by the government which is available for the duration of 15 years available in pretty much every bank and post office in India. The rate of interest changes each quarter and the interest on PPF is tax-free.
This is not the only limited list, there are more ways to save on your taxes. Amount of gifts and inheritance from a will or property are excluded from tax. In any event, getting medical insurance can be advantageous for you and your family. Along with that, on the off chance that you are a business person, at that point, you can utilize your travel and food costs to save on tax, and tax deductions can be claimed on it.