While filling the tax in the financial year, many salaried employees are confused about what options to invest in to save tax. Before thinking about saving taxes it is important to know that you have information about tax slabs. We are talking about some of these options where you can save taxes by investing. In addition to Section 80C of Income Tax, there are several such allowances that provide relief to salaried employees with tax liabilities.
Section 80C, 80CC and 80CCD: Taxes can be taxed by investing in taxpayer life insurance, bank fixed deposit, tuition fees, Sukanya prosperity scheme, National Savings Certificate, pension fund through section 80C. Taxpayers can claim discounts up to Rs. 1.5 lakh under Section 80C, 80CC and 80CCD.
PPF: PPF’s investment is tax free in EEE ie Exxempt-XJampet-XJampart category. That is, the amount invested will be in tax-free income category. The interest paid will also be tax free and the amount on maturity will also be completely tax-free.
National Pension System- NPS accounts are of two types. The NPS Tier-I account is an account with a lock-in period, while the NPS Tier-II account is an alternate account with no lock-in period. Customers can avail of a total reduction of Rs 2 lakh under Section 80CCD (1) Section 80CCD (1B) of the Income Tax Act. This helps in making a retirement fund.
Health Insurance Premium- Individual can save tax under section 80D of income tax. If medical insurance is purchased for husband or children, a maximum of 25,000 deductions can be claimed. However, if the taxpayer’s parents are covered and they are above 60 years of age, then tax deduction up to Rs 30,000 can be claimed.