Minimizing tax liability is the prime concern of the tax payers by the time the tax planning session starts. It is something very much common to notice that the salaried people are paying more taxes than they are obliged to pay. It is the lack of knowledge and improper tax-planning exercise that arises such kind of situations. Tax saving is not only limited to section 80C, which is known by everybody, but there are many better ways to save taxes especially for the salaried people. Adequate time and effort needs to be devoted by the salaried people for tax planning exercise. If you have not yet thought about it then here are four best tax planning tips that would certainly help you out.
Utilize Entire 80C Section: If you think that it is only the income slab that decides on your tax payment then you are wrong. To plan your tax in the best manner you need to utilize the entire 80C section which includes Public Provident Fund, National Saving Certificate, Accrued interest on National Saving Certificate, Life Insurance Premium, Tuition fees paid for children’s education (maximum 2 children), Principal component of home loan repayment, Equity Linked Savings Schemes (ELSS) and 5-Year fixed deposits with banks and Post Office.
Beyond 80C there are Possibilities: It is not only the section 80C that will help you in saving tax, you need to think beyond that as well. Home loan, education loan, donation, medical insurance, these all are the places where your investment will also make you to save tax and that too legally.
Restructure Salary: It is a better way to reduce the tax liability if you will seriously look into the matter. If you are not capable for investment on income on other things just restructure your salary and you will get a better way.
Claim Tax Benefit on Home Rent: In case HRA is not a part of individual’s salary then he or she can claim for the rent paid under residential accommodation. This deduction is available under Section 80GG.
These are the four better ways for tax planning for salaried people. It is always necessary to have a good planning of income and expenditure so that one can save money on taxes. Consulting a good tax service company would also help in this way.