Generally, annual income up to Rs 5 lakh is tax free, which means that you do not have any tax liability. It has to pay tax on higher income. Let us know how you can save your tax.
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if you too Income Tax If you fill then this news can be of your use. If your income is more than 2.5 lakh rupees then you must pay income tax. It is mandatory for citizens with annual income of more than 5 lakhs to file ITR. According to the Income Tax Act 1961, taxpayers who do not file tax returns within the deadline, have more chances of getting income tax notices. your own to avoid tax return Must be filled on time.
According to the report of Money9, there is only some time left for the end of the current financial year. Taxpayers are being asked for their investment details in the offices. That’s why people have already started financial planning. This includes taxpayers who invest at the very last moment. They are looking for investment avenues for tax saving. Generally, annual income up to Rs 5 lakh is tax free, which means that you do not have any tax liability. It has to pay tax on higher income. However, by choosing the investment option, taxpayers can get tax exemption even on income of more than five lakh rupees. A taxpayer can also declare income up to Rs 10 lakh tax free.
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Income tax free up to 2.5 lakhs
According to the Income Tax Rule, there is no tax liability on income up to 2.5 lakhs annually. There is a rule of 5% tax on income of Rs 2.5-5 lakh. Income tax has to be paid at 20% on income between 5 to 10 lakhs and 30% tax on income above 10 lakhs.
Let us understand this in an even easier way. Suppose someone’s CTC is Rs 10 lakh. In this way, according to his annual income, he comes under the purview of 20 per cent tax slab. But if he wants, his tax can be saved. For this, he has to choose all kinds of investment options. In this way he can get exemption in income tax.
standard deduction
Income tax rules clearly state that up to Rs 50,000 is available as standard deduction. So deduct this amount from your earning of Rs 10 lakhs, then it will be Rs (10,00,000-50,000=9,50,000).
Saving under 80C
After this, you can save tax of Rs 1.5 lakh under 80C. Saving schemes like EPF, PPF, ELSS, NSC come in this. By investing in these, you can get more tax exemption. Apart from this, you can also take tax exemption in the form of tuition fees for two children. Now deduct Rs 1,50,000 from Rs 9,50,000, so now your income of Rs 10 lakh will come within the range of Rs 8 lakh.
home loan
Individuals with a home loan can make a tax saving of two lakh rupees. Under section 24B of Income Tax, the home loan borrower gets tax exemption on the interest of two lakhs. Now subtract it from your annual income. (8,00,000-2,00,000= 6,00,000). In this way, now your 6 lakh rupees will come under the purview of income tax.
National Pension System
If you separately invest up to Rs 50,000 annually in the National Pension System (NPS), then under section 80CCD (1B) you can save an additional Rs 50,000 income tax. (6,00,000-50,000 = 5,50,000). In this way, now the income of Rs 5.5 lakh will be taxable.
health policy
Now by taking a medical policy under section 80D of income tax, you can save tax up to Rs 25,000. You, your wife and children should be named in this health insurance. Apart from this, if your parents are senior citizens, then you can save up to Rs 50,000 more by buying health insurance in their name. Now subtract this. (5,50,000- 75,000 = Rs.4,75,000). In this way, your income of Rs 10 lakh will now be out of tax liability and you will be saved from paying tax.