Best Tax Saving Methods – Know & Save

In today's time, every person pays a large part of his income as tax. But do you know that through proper planning you can reduce your tax and save more? The government has made many such provisions, by using which properly you can get tax exemption. In this blog, we will tell you the best tax saving methods , so that you can invest your hard-earned money in the right place.

Best Tax Saving Methods

1. Tax savings under section 80C

Under Section 80C of the Income Tax Act , you can get a tax exemption of up to ₹ 1.5 lakh . For this, you have to pay attention to certain investments and expenses, such as:

  • Public Provident Fund (PPF) – The best option for safe and tax-free returns.
  • Equity Linked Savings Scheme (ELSS) – This mutual fund option offers tax savings and good returns in the shortest possible time with a lock-in period of 3 years.
  • National Savings Certificate (NSC) – An excellent means of safe investment.
  • Life Insurance Premium – Your term insurance or other insurance plan can also help you save tax.
  • Tax Saving Fixed Deposit (FD) – With a lock-in period of 5 years, this is a safe tax saving method.




2. Tax exemption on house loan (Section 80C and 24B)

If you have taken a home loan , you can save tax in two ways:

  • Section 80C – Deduction of up to ₹1.5 lakh on the principal amount of home loan.
  • Section 24B – Exemption of up to ₹2 lakh on interest paid on home loan . 
  • If the property is rented out and not for personal use, there is no upper limit on interest.

3. Tax savings through National Pension Scheme (NPS)

If you want to save for your retirement, National Pension Scheme (NPS) is a great option.

  • Section 80CCD(1) – Tax exemption up to ₹1.5 lakh on contributions made to NPS .
  • Section 80CCD(1B) – Additional deduction of ₹50,000 , taking the total tax saving to up to ₹2 lakh .

4. Tax exemption from medical insurance (Section 80D)

Health insurance not only protects you from medical emergencies but also helps in saving taxes.

  • Up to ₹25,000 discount on taking health insurance for yourself and family .
  • If parents are senior citizens, additional discount of up to ₹50,000 .

5. Tax exemption on education loan (Section 80E)

If you or any member of your family has taken an education loan for higher education , then you can get tax exemption on its interest under section 80E . There is no maximum limit on this, but exemption is available only on interest payment.

6. Tax exemption on rented house (Section 80GG and 10(13A))

If you live in a rented house and you do not get HRA (House Rent Allowance), then you can avail tax exemption under section 80GG . At the same time, employees who get HRA can avail exemption under section 10(13A) .

7. Tax exemption on donation (Section 80G)

If you donate to an NGO, charitable trust, or the Prime Minister's Relief Fund, you can get tax exemption under Section 80G .

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8. Avoidance of Capital Gains Tax

If you make a profit by selling any property, gold, or other asset, you may be subject to capital gains tax .Tax under sections 54, 54EC, and 54F

conclusion

There are many ways to save tax, but the most important thing is to plan your income, expenses and investments properly . The right strategy

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