Do you feel that you are paying too much tax? Have you ever thought of how to save tax from your taxable income?
Whether you are a veteran taxpayer or a first timer, if you haven’t been planning your taxes properly, you have likely been paying more tax than you should. Income Tax laws appear so complex that people are scared to deal with their taxes. Why won’t they be scared? After all, the man with the greatest mind, Einstein himself called taxes the hardest thing to understand. Such people let their employers drain plenty of money as TDS from their salary.
Don’t fall in such category. Honestly, saving taxes isn’t as difficult as you think it is. There are so many things that you do unknowingly which can save your tax. All you need to do is to claim the tax benefits. If you put little effort, you can save more tax than you can imagine. In this article, H&R Block brings you some of the latest and completely legal ways of saving taxes.
Let’s talk about tax saving expenses first. We incur several regular expenses which make us eligible for tax benefits but we fail to utilise them due to our ignorance. Here are some common expenses which can save a lot of taxes for you.
Common Tax Saving Expenses
1) Tuition fees:
We often spend a considerable amount of our income to provide best education to our kids. I-T laws provide you opportunity to compensate the expenses you incur on their tuition fees by reducing your taxes. You can claim this deduction u/s 80C of I-T Act.
[ Read: Claim Tuition Fees as Tax Deduction ]
2) Deduction on rent paid (without HRA):
Don’ t worry if you don’ t get HRA in your salary as you can still get tax benefit as per the provisions of section 80GG of I-T Act.
3) Repayment of home loan:
You will be glad to know that the burden of your home loan EMIs can reduce the burden of taxes. You can get the benefit on both principal & interest component of your instalments. If you are paying for your first house then you can save even greater amount of tax. All these deductions are covered under section 24, section 80C and section 80EE.
4) Repayment of education loan:
Due to rising costs of educational courses, people often go for education loans when it comes to higher education. Just like deduction available on tuition fees, your education loan EMIs also bring tax benefits to you. Income Tax Act has separate provision under section 80E to provide you this tax benefit for interest paid on your education loan.