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!