All of us want to save money as much as we can, provided it is legally correct. How to save Income Tax is probably one of the most searched phrases when it comes to saving money for taxpayers. All of us should always pay our income tax as it goes in nation-building and strengthening the economy. But, intelligent, planned and strategic investments can help us save some money to pave the way for a financially secure future. Here are some of the top options every taxpayer must explore in order to save some income tax:-
Owning a home offers the triple benefit of house rent saving, property appreciation in the long term and tax benefits. If you are staying on rental property, then your rental expense is going to increase every year, whereas your EMIs is almost fixed (if interest rates do not change) Finance minister Nirmala Sitaraman in her Budget 2021 has extended timeline for availing additional tax benefit of Rs 1.5 lakhs under section 80EEA. Under 'Housing for All', the government is giving tax deduction benefits of up to Rs 3.5 lakhs (Rs 2 lakhs under section 24), which cannot be ignored.
Unlimited benefit of tax deduction on interest on education loan. The tax claim starts from the same year in which the loan repayment starts. Its benefit is available for the next 7 years. That is, you can take tax exemption for a total of 8 years. Tax exemption is available on the education loan of two children simultaneously. If a loan of 25-25 lakhs is taken at a 10% interest rate for two children, then the annual interest will have to be paid Rs 5 lakhs on a total of Rs 50 lakhs. Tax exemption will be available on this entire amount.
Under Section 80EEB of Income Tax, if you have taken a loan
to buy an electric vehicle, you can avail of tax exemption of up to Rs 1.5 lakh
on the interest paid.
However, this tax exemption will be available only on loans taken between April
1, 2019, to March 31, 2023.
If HRA is not a part of your salary, you can claim a house rent payment under section 80GG. Yes, if your company gives HRA then you cannot claim house rent under 80 GG.