Whereas most individuals are aware of customary tax-saving strategies like investing in PPF, ELSS or claiming deductions underneath Part 80C, there are just a few lesser-known and weird methods that may make it easier to save in your revenue tax.
Listed here are eight unconventional however efficient methods to cut back your tax burden and maximise your financial savings.
1) Pay Hire To Your Dad and mom And Declare HRA
Dwelling along with your mother and father in a home they personal? You possibly can pay them lease and declare Home Hire Allowance (HRA) as a deduction underneath Part 10(13A). Simply guarantee you’ve a proper lease settlement and your mother and father report the revenue on their tax return. It is a nice approach to save taxes whereas contributing to your loved ones’s funds.
2) Purchase Well being Insurance coverage For Senior Citizen Dad and mom
Part 80D of the Earnings Tax Act permits you to declare a tax deduction of as much as Rs 25,000 yearly on medical health insurance premiums. For senior residents, this restrict rises to Rs 50,000. Moreover, you’ll be able to declare an additional Rs 5,000 for preventive well being check-ups. This profit covers medical health insurance for your self, your partner, mother and father and dependent youngsters.
The tax deduction is additional damaged down as follows — in case you are under 60 years and have mother and father above 60 years, you’ll be able to declare a deduction of Rs 25,000 for your self and your loved ones and Rs 50,000 in your mother and father, totalling a most deduction of Rs 75,000. If each you and your mother and father are above 60 years, the utmost deduction will increase to Rs 1,00,000, with Rs 50,000 for self and household, Rs 50,000 for folks.
3) Training Mortgage Curiosity, Even For Your Household Members
You possibly can declare a deduction for curiosity paid on an training mortgage underneath Part 80E, even in case you are not the coed. This implies you’ll be able to take loans in your self, partner or youngsters or for a pupil for whom you’re a authorized guardian, and nonetheless declare deductions. This is a wonderful approach to help your loved ones and save on tax.
4) House Mortgage Prepayments
Many individuals overlook that even house mortgage prepayments can result in tax financial savings. Past the common deductions out there underneath Sections 24(b) and 80C for curiosity and principal reimbursement, part-prepaying your private home mortgage can scale back your curiosity burden and nonetheless qualify for deductions. This helps in decreasing your mortgage quicker whereas saving taxes.
5) Deduction For Donations Past Part 80C
Do you know that charitable donations are deductible underneath Part 80G, even for those who’ve already maxed out your Part 80C restrict? Donations to qualifying organisations or catastrophe reduction funds can scale back your taxable revenue. Simply be sure you get the receipt and examine the eligibility of the charity for the proper deduction proportion.
6) Make investments In NPS For An Additional Rs 50,000 Deduction
Whereas many individuals put money into the Nationwide Pension System (NPS) for retirement, not everybody is aware of in regards to the further tax advantages it presents. Below Part 80CCD(1B), you’ll be able to declare a further Rs 50,000 deduction on NPS contributions, which is over and above the Rs 1.5 lakh restrict underneath Part 80C, making NPS a strong device for tax saving.
7) Declare Depart Journey Allowance (LTA)
LTA permits you to declare tax deductions for home journey bills incurred whereas on depart, as much as twice in a block of 4 years. The primary factor right here is to plan your journey effectively and hold correct documentation like prepare or flight tickets and lodge payments. Many taxpayers miss this chance, however with the fitting planning, LTA can considerably scale back taxable revenue.
8) Take Benefit Of Tax Advantages For Electrical Automobiles
The federal government presents tax incentives for getting electrical automobiles (EVs) underneath Part 80EEB. For those who’ve purchased an EV, you’ll be able to declare a deduction of as much as Rs 1.5 lakh on the curiosity paid in your mortgage for the car. That is an environmentally pleasant approach to save tax whereas contributing to a greener future.
Tax saving doesn’t should be restricted to the standard strategies. By making use of those above methods, you’ll be able to scale back your taxable revenue and hold more cash in your pocket.
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