As we approach the conclusion of the financial year, there are several important matters to address, one of which involves managing your investments and tax planning. As the well-known saying goes, "A penny saved is a penny earned." Tax planning is essential for maximizing savings and income. The income tax regulations offer deductions for various investments, savings, and expenses incurred by taxpayers during the fiscal year. Let's explore some strategies to help you minimize your tax liability. Let's gather all of those here, along with a few additional options.
Are rent payments considered as expenses? What about interest payments or insurance premiums? Well even though these are expenses, these can still aid in tax savings. If you're a salaried individual, you can claim rent paid as an exemption from your salary income. The House Rent Allowance (HRA) exemption is applicable if it's part of your salary structure. Ensure to check for this allowance in your salary, and if present, keep all relevant documents such as rent agreements and payment receipts handy, as they facilitate significant tax savings.
Similarly, if you've acquired a property through a home loan, you can claim deductions under the head of Income from House Property. Notably, principal repayment qualifies as a deduction under Section 80C. Deductions under Section 80C and Section 80D are also applicable for life insurance and medical insurance premiums, respectively.
To simplify, here's a table outlining common expenses/investments eligible for deduction from your taxable income:
Sr. No. | Particulars |
1 | House rent expense (In case of salaried person) |
2 | Interest expense on home loan |
3 | Principal repayment of home loan |
4 | Interest expense on education loan |
5 | Contribution to Provident Fund (PF) |
6 | Contribution to Public Provident Fund (PPF) |
7 | Contribution to Citizen Savings Scheme (SCSS) |
8 | Contribution to Sukanya Samriddhi Yojana (SSY) |
9 | Contribution to National Pension Scheme (NPS) |
10 | 5-year bank fixed deposit (Tax saving FD) |
11 | Investment in ELSS mutual funds |
12 | Premium payment of life insurance (For self and family) |
13 | Premium payment of medical insurance (For self and family) |
14 | Donation to charitable institutions |
15 | Donation to political party |
16 | Children’s school tuition fees |
There are numerous calculations and intricacies associated with claiming these deductions. It's important to note that these activities are time-sensitive and must be completed before March 31, 2024, to avail the benefits for the Financial Year 2023-24.
To understand more about such interesting concepts, stay tuned.
Until next time !!!
