What are the best ways to save tax for the F.Y.2021-22 as per Budget 2021?
If you are a person with a net salary of Rs 5 lakh to Rs 15 lakh per annum, you must first know about your existing tax liability. Once you have determined the amount of tax you have to pay, you must plan to save tax with the benefit of tax exemption under the relevant provisions of the Income Tax Act. For the best tax savings, you can invest in tax saving options, make voluntary grants, take out a home loan or ask your employer to restructure your salary. To avoid any stress or hassle while filing your Annual Income Tax Return (ITR) you must remember the plan initially for tax savings.
1. The best way to save tax: Learn more about the best way to save tax:
Investing in tax saving options - The best way to save tax is to invest your hard-earned money in various tax-saving instruments. Here, you can avail of tax exemption up to Rs 1.5 lakh under Section 80C of the Income Tax Act. You can choose to invest:
Employees Provident Fund (EPF): This is a retirement benefits scheme for salaried employees. Here, 12% of the basic salary and value-added allowance (DA) is deducted by the employer. This fund is then deposited in government-recognized provident fund schemes.
You may also, like- Automated
Income Tax Revised Form 16 Part A&B and Part B which can prepare One by One Form 16 Part
A&B and Part B for the F.Y.2020-21 as per new and old tax regime U/s 115
BAC
Public Provident Fund (PPF): These are government-sponsored investments with a minimum lock period of 15 years. You can partially withdraw funds after 7 years and earn an interest of about 8%.
Equity Linked Savings Scheme (ELSS): These are tax-saving mutual fund schemes that offer double the benefit of tax savings with higher market returns. The minimum lock-in period of 3 years.
Sukanya Samridhi Account: You can invest a maximum of Rs 1.5 lakh per annum in this government-supported project. As the father or mother of a girl child, you can open an account in the name of your own girl child and earn interest up to 8.5%.
Tax Saving Fixed Deposits: These are similar to traditional fixed deposits but have a minimum lock-in period of 5 years. You can pay interest from 7% to 9%.
You may also, like- Automated
Income Tax Revised Form 16 Part B which can prepare One by One Form 16 Part B for the
F.Y.2020-21 as per new and old tax regime U/s 115 BAC
National Savings Certificate (NSC): Minimum lock period of 5 years. Interest payments up to 8% are further increased on an annual basis.
National Pension Scheme (NPS): This is a social security scheme providing retirement benefits to government, private and unorganized sector workers. The former allows a mandatory account and allows withdrawals only after retirement
. 2. Voluntary Donations - You can consider tax savings by donating. You can donate to various relief funds, such as the Prime Minister's Relief Fund, the Fund for Drug Abuse Control, to clean up gang funds, or to voluntarily contribute to recognized NGOs. All these grants are fully exempt from tax under Section 80G of the Income Tax Act.
3. Home Loan - Did you know that taking a home loan can also give you tax savings? Under Section 80C of the Income Tax Act, both the amount of interest and the principal amount of your home loan is exempt from paying tax.
You may also, like- Automated
Income Tax Revised Form 16 Part A&B which can
prepare at a time 50 Employees Form 16 Part
A&B for the F.Y.2020-21 as per new and old tax regime U/s 115 BAC
4. Salary Restructuring: You can request your employer to restructure your salary in a way that allows tax savings allowance for this allowance includes house rent allowance (HRA), vehicle, personality development, treatment, telephone, uniform, office entertainment etc. There are four
Conclusion: You can save tax through various methods including investment of Unit Linked Investment Products (ULIPs). ULIPs offer a dual benefit of investment and protection through high, market-linked returns and life insurance. You can zero in on Canara HSBC Oriental Bank of Commerce Life Insurance's investment 4G plan. It is a protection and savings-oriented unit-linked insurance plan that allows tax savings on maturity benefits in addition to paying premiums.
Download Automated Income Tax Revised Form 16 Part A&B which can prepare at a time 100 Employees Form 16 Part A&B for the F.Y.2020-21 as per new and old tax regime U/s 115 BAC
