7 Tax Saving Tips for Salaried Individuals

Are you interested to lower your tax outgo on your salary? If yes, then we’ve got you covered. This post covers some infallible ways that can be used by salaried individuals to make the most of their saving.

  1. Consider submitting your medical bills on time

To save tax on your salary, it is favourable to safely keep all the receipts of your medical expenses. Doing so can help you gain the tax benefit on your as well as your dependents medical expenses of up to Rs 15.000.

  1. Gain tax benefits on rent paid

Salaried individuals can claim tax benefit on HRA if they live in a rented accommodation. This can be partially or completely exempt from tax.

  1. LTA deduction for travel expenses

This is another best method to save tax for salaried individuals. You can claim LTA (Leave Travel Allowance) two times in a period of four years. It is not a mandatory benefit; it’s all up to your employer that while deciding your pay structure, LTA can be included or not.

  1. Daily Travel Allowance

Employees can also use this tax saving tip to gain some tax relaxation. You can ask your employer for daily travel allowance. However, it is implemented to support your expenses only of the commute between work place and residence. Daily travel allowance of Rs. 1,600/month is exempt from tax.

  1. Ask for meal coupons

You can ask your employer to pay a portion of your salary in form of food coupons. These are liable up to Rs 55/day. Therefore, you can get a part of your salary in form of meal coupons for 22 working days for up to 2 meals which results in around Rs. 26,400/year tax saving.

  1. Consider purchasing medical insurance for your family

According to section 80D, a salaried individual can claim a deduction of maximum Rs. 25,000 by purchasing medical insurance policy for him/herself as well as for his/her family (spouse and kids). To get the additional benefit, you can also buy medical insurance for your parents and claim Rs 30,000.

  1. Money under VRS

Public sector employees doing job under the State or Central Government can avail this tax benefit. If such an employee opts for voluntary retirement, then the money he/she receives as a result of VRS is free from tax up to Rs. 5 Lakh.

5 Best Ways on How to Save Tax Legally

Have you ever considered that how to save tax on your income? Whether you are a first-timer or old-hand taxpayer, if you’re not planning your taxes in a proper manner, then there is a probability that you are paying more taxes than you should. Most people find the process of tax laws really complex that they are startled to deal with it. We recommend you to don’t fall into the category of startled people. Saving tax is, honestly, not as complex as you think. There are many things which can help in saving tax for you. This post covers some completely legal ways that can be used by you to save tax. Let’s check them out:

  1. Tuition Fees

People spend a significant amount of their income to make their kids educated. I-T laws help you compensate those expenses by reducing your taxes. You can anytime claim such deductions as per the 80C of I-T Act.

  1. Education Loan Repayment

These days, a heavy rise in the cost of various education courses has been witnessed and to do such courses people often opt for education loans. Similar to deduction available on the tuition fees, education loan EMI’s submitted by you can also bring tax benefits. As per the 80E section of Income Tax Act, you can get the tax benefit for the interest paid by you on your education loan.

  1. Medical Insurance

Health check-up and medical expenses are a part of every individual’s life. If you spend some money from your income on medical insurance or towards preventive health check-up, then as per tax laws you can get some tax gains. According to the section 80D of Income Tax Act, an individual can get a deduction up to 60,000 Rs. To get the benefit, you are advised not to pay your premiums for Medical Insurance in cash.

  1. Pension Funds

Preferably, from the day one starts earning money, he/she should start planning the day of their retirement. One of the ideal ways to do so is to invest income in pension funds. Luckily, this can help you reduce your taxes. In such cases, provision related to the tax benefits are covered under various sections that includes Section 80C, Section 80CCC, Section 80CCD(1), Section 80CCD(1B), and Section 80CCD(2).

  1. Home Loan Repayment

You’ll be delighted to know that by paying your home loan EMIs, you can reduce the burden of taxes. Best of all, you can get the advantage of both interest and the principal component of your installments. If the case is that you are paying installments for your first home then a huge amount of tax can be saved. Home Loan Repayment deductions are covered under various sections that include Section 24, Section 80C, and Section 80EE.

Why not start using aforementioned tax saving methods from today onwards and get set to optimize your tax life. If you have some other best ways to save tax on your income in your arsenal then don’t forget to post your views in the comment section below. Happy Tax Savings!