Income Tax Saving: Often people invest at the last moment to save tax, due to which they are not able to save much tax. But if tax saving planning is done at the beginning of the financial year itself, then you can save lakhs of rupees. Especially your annual income should be Rs 10 lakh. Here some methods are being explained, under which you can save tax worth lakhs of rupees.

The government has fixed the limit of tax exemption up to Rs 7 lakh under the new tax regime, while exemption has been given on annual income up to Rs 5 lakh under the old tax regime. In such a situation, if your income is more than these two tax regimes, then you will have to adopt some methods to save tax. Let us know how you will not have to pay even a single rupee tax on an income of Rs 10 lakh?

How much tax is levied on earnings of Rs 10 lakh?

To save tax on annual income of Rs 10 lakh, you will have to opt for the old tax regime. There are different tax slabs available under the old tax system. Under the old tax regime, the Income Tax Rule says that no tax will have to be paid on annual income up to Rs 2.5 lakh. There is a provision of 5% tax on income of Rs 2.5-5 lakh. Whereas 20% tax is charged on annual income of Rs 5-10 lakh. There is a 30% tax slab on annual income of Rs 10 lakh and above.

You will not have to pay even a single rupee of tax

If your annual income is Rs 10 lakh then you will have to pay 30 percent tax. However, if you want, you will not have to pay even a single rupee. You can save the entire amount of tax by making some investments and taking advantage of deductions.

How can you save tax on Rs 10 lakh income?

A rebate of up to Rs 50 thousand is available as standard deduction. In such a situation, tax will now be charged on Rs 9.50 lakh.
By investing in schemes like PPF, EPF, ELSS, NSC, you can save tax of Rs 1.5 lakh under Section 80C of Income Tax. Now tax will have to be paid on Rs 8 lakh.

If you invest up to Rs 50,000 annually in the National Pension System (NPS), you are given an extra Rs 50,000 tax exemption under Section 80CCD (1B). Now if we subtract Rs 50 thousand more, tax will be charged on Rs 7.50 lakh.

If you have also taken a home loan, you can save up to Rs 2 lakh on its interest under Section 24B of Income Tax. If we subtract Rs 2 lakh more from Rs 7.50 lakh, the total tax income will be Rs 5.50 lakh.

You can save tax up to Rs 25 thousand by taking a medical policy under Section 80D of Income Tax. Your name, your wife and children’s names should be there in this health insurance. Apart from this, if in the name of your parents

You can get additional discount of up to Rs 50,000 by purchasing health insurance.
In such a situation, if you subtract 75 thousand from Rs 5.50 lakh, the total tax liability will be Rs 4.75 lakh, which will be below the old tax regime limit of Rs 5 lakh. This means that you will not have to pay a single rupee tax on annual income of Rs 10 lakh.

Indian Railways Rules : Good news for lakhs of passengers traveling by train, this rule of buying train tickets has changed, know now

The post Income Tax Saving Tips: You will not have to pay even a single rupee tax on income up to Rs 10 lakh, know how to save first appeared on Rightsofemployees.com.

EEE means Exempt Exempt Exempt. There are three ways in which tax is saved in the schemes falling in this category. In this, there is no tax on the amount deposited every year, apart from this, there is no tax on the interest earned every year and the entire amount received at the time of maturity is also tax free i.e. investment, interest/return and maturity are tax free. There is savings. Know in which schemes you can avail this benefit-

Public Provident Fund (PPF)

PPF is a better option to save tax and invest in a safe place. Under this scheme, any investor can deposit a minimum of Rs 500 and a maximum of Rs 1.5 lakh in a year. Annual interest of 7.1 percent is available on PPF. The special thing about this scheme is that the investment money, interest received on the investment money and maturity amount are all tax free.

[

Under this scheme the investor gets 8.2 percent interest. Under this scheme, any father can deposit Rs 250 to Rs 1.5 lakh annually in his daughter’s account. The money is deposited for 15 years and when the daughter turns 21, the entire amount along with interest is returned to the investor. To invest in this, the daughter’s age should be less than 10 years.

Equity Linked Savings Scheme (ELSS) is also called tax saving mutual funds. In equity linked saving schemes, you can deposit money in lump sum and can also do it through SIP. Its lock-in is for three years. After this you can withdraw money whenever you want or continue your investment. If you withdraw the amount after 3 years, you get tax benefits.

Employee Provident Plan (EPF)

If you are employed then you can also save your tax through EPF. EPF is also an EEE category scheme. At present 8.25 percent interest is given on it. In such a situation, you can add a good amount of money through this scheme. If you want, you can also increase your contribution through VPF.

Home Loan : These 5 big banks are offering the cheapest home loans, check the complete list

The post Income Tax Saving Tips: These 4 schemes come in EEE category, if you invest money in them, tax will be saved in 3 ways. first appeared on Rightsofemployees.com.

If tax is payable on your salary, the company deducts it. However, the final calculation of income tax is done by the Income Tax Department only after filing ITR. The Income Tax Department either deducts tax from your financial year’s earnings or sends you a tax refund.

How to pay minimum income tax?

The question that every employee has is how to avoid income tax or at least how to pay income tax? If you have selected the old tax regime then you will definitely have this question. Tax exemption of Rs 12,500 is available under Section 87A of the Income Tax Act. There are many investment options under the old tax regime. Even if your salary is Rs 12 lakh, you do not need to pay tax of Rs 1.

Planning is necessary to save tax

Chartered Accountant Ashish Mishra says that to save income tax, you need to plan your savings properly. For this you can take advice from any expert. If the company has deducted your tax, then you can get the deducted money back by filing ITR. On salary of Rs 12 lakh, you come under 30 percent tax bracket under the old tax regime. It would be better for you to select the old tax regime on this salary. See the complete calculation…

This is the complete mathematics

1. Any company pays the salary of its employees in two parts. In this, the first is called Part-A and the second is called Part-B. At some places it is called Part-1 and Part-2. Generally, on a salary of Rs 12 lakh, Rs 3 lakh is kept in Part-B or Part-2. In this way your taxable income reduces to Rs 9 lakh.

2. First of all, you subtract Rs 50,000 given by the Finance Ministry as standard deduction. After deducting these, your taxable income reduced to Rs 8.50 lakh.

3. You can claim savings of up to Rs 1.5 lakh under Section 80C of Income Tax. In this, tuition fee, LIC, PPF, Mutual Fund (ELSS), EPF or principal amount of home loan can be claimed. In this way taxable income reduced to Rs 7 lakh.

4. Under Section 24B of Income Tax, a rebate of Rs 2 lakh is available on home loan interest. Now after reducing this, the taxable income reduced to Rs 5 lakh. Rs 12,500 is taxed on income of Rs 5 lakh. But the Income Tax Department gives exemption in this under Section 87A.

More options for tax saving

If your salary is more, then to make the income tax zero (0), you will have to invest Rs 50 thousand in NPS under 80CCD (1B). Apart from this, under Section 80D, you can claim premium for health insurance of children, wife and parents. Premium up to Rs 25 thousand can be claimed for child and wife. You can claim Rs 25000 separately for parents. If your parents are senior citizens then you can claim Rs 50,000 as premium.

The post Tax Saving: No income tax to be paid on salary of Rs 12 lakh, know CA’s calculation… first appeared on Rightsofemployees.com.