There are various tax-saving investments under Section 80C of the Income Tax Act. Investing in these funds can get you tax exemption up to Rs 1.5 lakh. Some of the funds are:
• Public Provident Fund (PPF)
• Life insurance
• Equity-linked savings scheme (ELSS)
• Fixed deposits
• National Savings Certificate (NSC)
Also, you get an additional exemption of Rs 50,000 if you:
• Invest in National Pension Scheme (NPS)
• Have a home loan. Your tax is exempted if you are repaying the principal and interest components of the loan.
Furthermore, your saving account interest can be claimed as an exemption up to Rs 10,000. So, explore all possible investment options and reduce your taxable income.
Take help of family members to save tax
If you are living in a property owned by your parents, give them rent and claim the HRA. If you don’t have an HRA component, you can still claim exemption on the rent paid under Section 80GG of the Income Tax Act.
You can invest in a tax-free instrument in your spouse’s name. This can earn you tax-free income.
Pay health insurance premiums for your family and parents. If all your family members are below the age of 60, you can earn a tax exemption of Rs 50,000. If your family is below is 60 but your parents are above that age, the maximum tax exemption is Rs 55,000. If all of them are above 60, the tax exemption ceiling is Rs 60,000.