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| Tax Saving Tips
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The Department of Income Tax provides numerous provisions whereby an individual may save tax, in a perfectly legal manner. When employed, these techniques would lead to a lower tax payment, that means a higher net income. In this section we however look at income tax for an individual. Here are a few tips:
• Ask your employer to create a tax friendly package. LTA, conveyance, Medical allowance help to cut down on income tax.
• Ask your employers to replace part of your salary with food vouchers such as Sodexho
• Save as much tax under section 80(c) as possible by selecting the instruments best suited to your risk appetite.
• If you are salaried and living in a rented house, declare the same to your employer since it can help bring down your taxable income.
• REMEMBER – HRA is exempt over and above the limit set by section 80C
• Look out for investment plans that provide a tax exemption on returns which would mean that all growth/returns can be fully enjoyed by the you.
• A mediclaim provides rebate over and above the 1Lac limit of Section 80C. Incase you do not have medical insurance buying a plan for yourself and your family can also provide you further tax relief.
• Homeloans not only contribute to exemption under section 80(c), but can also reduce your taxable income through interest repayment under section 24.
• Incase, interest outflow is high, it may be advisable to take a joint home loan so that the interest exemption can be shared between both the applicant and the co-applicant.
These tips are meant to help you reduce your tax outflow. However for the best individual advice please consult our team of experts.
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