Several way salaried people can save tax?

As soon as the end of financial year comes closer, salaried individual start worrying about how to save tax? The point is, no one wants to waste their hard earned money on tax.  Often, people choose illegal way to run away by tax. Thus, before, recognizing you as tax evaders, why don’t you consider some legal practices to save your money by tax?  Now, it’s basically up to you how to invest your money in various schemes to get the tax benefit. Talk to your employer and try to restructure your salary to get extra tax assumption. Here, we will focus on several interesting way to save tax, might be, you aware with few of them, but,  in this post, you will find some more fascinating tax saving options.

Public Provident Fund- frequently investing in Public Provident Fund account always gives tax benefit. Alongside, now you don’t have to pay taxes on interest received from Public Provident Fund investments.

EPF account- basically it’s a retirement saving plan, well-organized companies contribute to EPF account in case of basis salary less is than 15000/month. Alongside, employee also contribute equal amount in employee account. Under section 80C, you can get tax exemptions while contributing in EPF account.

House rent allowance- if you are paying rent and still not getting any HRA to your company. On the basis if given below conditions, you can claim for HRA. Under Section 80GG:

·         Real HRA

·         Rs 2,000 per month

·         10 per cent of total income

·         Rent paid less than 10% of salary

·         50% of Basic for Metro City or 40% of Basic for other City

Home Loan- if you have taken home loan you can get tax benefit on it. In 2016 budget, for home loan interest payment, the limit of assumption is increased to 2.5 lakhs.  In this way of deduction, you can save big tax money. Indeed, more home loan amount leads to more tax saving.

Medical Insurance- under Section 80D, there is provision for Deduction of Rs. 15,000 for medical insurance of self, wife and children alongside, Rs. 20,000 for parent’s medical insurance who is above 65 years.

Education Loan- if you have taken Education Loan for self, spouse or children than it will be applicable for the deduction. However, Interest which you paid on education loan is always non-taxable. Hence, summit your loan installment papers and prove while paying income tax in the year end.

Life Insurance - Life insurance is investments you pay to make sure that your beloved are not left stranded in case of some miss happening occur to you. Life Insurance premium considered another tax saving option for years.

Fixed deposits – salaried person can save tax on fixed deposit in bank which is applicable for the period of 5 years. Before maturity (5 years) you can’t withdraw tax saving FD. Senior citizens get a higher interest rate in fixed deposits policy.

Invest in Mutual fund – it has tax implications and remains one of the best ways to avoid tax, if you invest in mutual funds then you can earn profits 100% non-taxable in various criteria. Nowadays, salaried person like to invest in Mutual funds and equity to get tax exemptions.

National Savings Certificate- post office small saving scheme, like fixed deposit it’s also give fixed return with interest rate of 8.5%. It’s an old but reliable way to avoid tax. It is applicable in duration of 5 years and ten year. Under section 80C, the National Savings Certificate gives tax benefit. 

Travel Allowance- in order to reimburse the expenditure incurred on the holiday, it is given by the employer to their employee. This allowance exempted from income tax, during paying the income tax at the end of year, you just need to summit the valid proof of travel to get tax exemption.