Ethical and intelligent options to save your income tax!

A salaried person would always wish to save income tax to the maximum extent possible. If planned  effectively,  one  can  save  a  significant  amount  of  income  tax  through  various  tax savings avenues which are in compliance with income tax rules.

Albert Einstein once said  "The hardest thing in the world tounder stand is the income tax.” in this blog we have tried to explain some alternatives which will help you to save income tax.

While most of taxpayers are aware of some popular options like Fixed Deposit and Provident Fund, here Legalo suggest some underrated or rather effectual ways to save income tax.

Re-direct investment through your senior citizen parents

According to the income tax law, senior citizens can avail of certain tax exemptions or benefits. You can gift money to your parents, which is tax free for them. Your parents can reinvest this money in various attractive senior citizen schemes like Pradhan Mantri Vaya Vandana Yojna, Senior Citizens’ Savings scheme and such similar schemes; this money can be utilized to re- direct your earnings from investments. However, your parents should have low income or no income or else, they will end up paying tax.

Save tax against expenses for internet and mobile

Internet and telephone reimbursement rendered to employees is non-taxable under Rule 3(7) (ix) of the income tax rules. This wayyou can save income tax on the expenses incurred on your mobile and internet. You are required to present the original bills to your employer to avail this tax-saving facility.

Save tax on charitable donations

You can donate money to charitable institutions and claim tax deductions up to 50% or 100% of the donated amount. But, you will have to ensure that those charities or trusts are listed under section 12A and check if they have an 80G certificate.

Equity Linked Savings Schemes (ELLS)

ELLS is an open-ended equity mutual fund that invests primarily in equities and equity related products. It is a tax-saving investment that will permit you to invest up to 1.5 lakh in certain securities and claim it as a deduction from your taxable income. This will assist you to save income tax under section 80C of the income tax act.

You can count on Legalo to connect you with the best Chartered Accountants, Tax Experts and Lawyers for prompt and economical solutions.

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