In the Pre-Budget Memorandum 2025, the Institute of Chartered Accountants of India (ICAI) has suggested to the Central Government that married couples should be allowed to file joint income tax returns (Joint Taxation of Married Couples). The purpose of this proposal of ICAI is to reduce the increasing tax burden on families. Let us tell you that the joint taxation system is applicable in many countries including America and England.

Currently, you can either opt for the default tax regime under section 115BAC or choose the normal provision for taxation. Moreover, the basic exemption limit under the default scheme for individual taxpayers is Rs 2.5 lakh, and under the new/default regime, it can go up to Rs 3 lakh.

Existing tax breaks are not enough

In most families in India, only one member is the breadwinner, so considering the rising inflation, the current exemption limit is not enough. Even if there is a family of just four people, the current tax exemption seems less. Due to which people try to save their tax by splitting their income among the family.

Therefore, ICAI has suggested starting a joint taxation scheme for married couples. While this will reduce the tax burden on families, it will also curb tax evasion.

Total taxable income and tax rates

According to ICAI, there should be no tax on income up to Rs 6 lakh. Tax rate should be 5% on income up to Rs 6-14 lakh, 10% on income up to Rs 14-20 lakh, 15% on income up to Rs 20-24 lakh, 20% on income up to Rs 24-30 lakh and 30% on income above Rs 30 lakh. If both husband and wife are employed, then both should get the benefit of standard deduction.

Apart from this, ICAI has also recommended increasing the surcharge limit. They have proposed that special rates should be applied on income above Rs 1 crore, which should be as follows:

• On income between Rs 1 crore and Rs 2 crore: 10% surcharge
• On income between Rs 2 crore and Rs 4 crore: 15% surcharge
• Surcharge of 25% on income above Rs 4 crore

Benefit of joint taxation

Joint taxation will especially benefit those couples in which one’s income is much higher than the other. By filing returns by combining their income, their tax liability will be reduced. Because tax liability will be decided on the basis of the average income of both.

In this way, filing returns together can reduce their tax burden as compared to filing separate returns. Now it remains to be seen whether this recommendation of ICAI is accepted in Budget 2025 or not.

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In India, citizens are given income tax exemption under the sections of the Income Tax Act 1961. All taxpayers are required to file ITR return once a year. If your income comes under the ambit of income tax, then you must pay tax. The government gives an opportunity to taxpayers who file ITR to save Rs 1.5 lakh annually in tax.

However, not all taxpayers are aware of how to save tax. Today we are going to tell you 6 such ways, with the help of which you can save tax up to Rs 7 lakh. You will have to pay zero tax on earnings up to Rs 12 lakh. Let us tell you that in the old tax regime, the government has already made income up to Rs 5 lakh tax free.

Know those 6 ways –

1. If your salary is Rs 12 lakh, then you can make it in such a way that your HRA will be Rs 3.60 lakh, your LTA will be Rs 10,000, and the expense of phone bills will be Rs 6,000. You will get a standard deduction of Rs 50,000 on salary under Section 16. You can claim exemption on profession tax of Rs 2500.

2. HRA of Rs 3.60 lakh can also be claimed under Section 10 (13A) and LTA of Rs 10,000 under Section 10 (5). With these deductions, your taxable salary will reduce to Rs 7,71,500.

3. If you have invested in LIC, PPF, EPF, or if you have paid your child’s tuition fees, you can claim an additional deduction of Rs 1.50 lakh under Section 80C.

4. Those who have invested in the Tier-1 scheme of the National Pension Scheme are eligible for an additional deduction of Rs 50,000 under section 80CCD. After both these deductions, your taxable income will be Rs 5,71,500.

5. Section 80D allows you to claim tax exemption for premiums paid on health insurance policies. While you can claim Rs 25,000 for health insurance premium for yourself and your spouse or your children.

6. You can claim an additional rebate of Rs 50,000 for the premium paid on the health policies of your senior citizen parents. With this you will get the benefit of deduction of Rs 75,000, due to which your income will reduce to Rs 4,96,500.

These schemes can also give tax exemption
under the income tax rules: Public Provident Fund (PPF), Employee Provident Fund (EPF), Equity Linked Saving Scheme (ELSS), National Pension System (NPS), Sukanya Samriddhi Yojana (SSY). Tax deduction is available on Senior Citizen Savings Scheme (SCSS) and Fixed Deposit (FDs) schemes with tenure of 5 or more.

According to tax experts, by investing your savings in these schemes, you can claim tax exemption as per the applicable conditions. Also, with this you can arrange more funds for yourself in the long run. Let us tell you that the last date of ITR file is 31 July 2024.

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ELSS is considered a better option among mutual fund schemes. ELSS investment amount is invested in the equity market. ELSS offers tax exemption up to Rs 1.50 lakh under Section 80C of the Income Tax Act. Many ELSS funds have also given impressive returns in the last 3 years. For this reason ELSS is also called tax saving mutual fund scheme. ELSS also offers you tax exemption on long-term capital gains up to Rs 1 lakh.

Lock-in period of only 3 years
You can deposit money in ELSS in lump sum and can also invest through SIP. The best thing about ELSS is that it has a lock-in period of 3 years, unlike the 5 years lock-in period in schemes like NSC and tax-saving FD. The investor can continue with the Equity Linked Savings Scheme after the lock-in period of 3 years is over.

ELSS: You can start investing even with Rs 500

In ELSS mutual fund, you get the option to choose the scheme as per your budget and convenience. You can start investing in it with just Rs 500. There is no limit on maximum investment. According to experts, long term investment in ELSS can give better returns.

Top-5 ELSS Mutual Funds (Returns in 3 Years)

Quant ELSS Tax Saver Fund- 32.35 percent
HDFC ELSS Tax Saver Fund- 25.02 percent
Bandhan ELSS Tax Saver Fund- 24.94 percent
SBI Long Term Equity Fund- 24.71 percent
Bank of India ELSS Tax Saver Fund- 23.88 percent

(Disclaimer: The information given here is based on the performance of the shares. Since investing in the stock market is subject to market risk, please consult a certified investment advisor before investing. RightsofEmployees responsible for any loss you incur Will not done)

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Finance Minister Nirmala Sitharaman has shared many ways to save tax, through which you can save lakhs of rupees. Let us tell you how you can save tax up to Rs 8 lakh.

Apart from this, you will also get the benefit of exemption on home loan under section 24 (b) of the Income Tax Act . In this, you will get the benefit of exemption only on the interest paid on your behalf. You can claim tax exemption on interest up to Rs 2 lakh in this

Discount will be available on auto loan If you buy any electric vehicle under section 80EEB of the Income Tax Act and you have taken this vehicle on loan, then you will get a discount of up to Rs 1.5 lakh on it.

Exemption will be available in section 80C.

You can take advantage of the exemption of up to Rs 1.5 lakh under section 80C. Through this, you can claim exemption by investing money in many schemes including LIC policy, PPF, EPF, NSC.

Apart from all these, you will also get the benefit of exemption under 80C on the principal amount of the home loan. You cannot get more than Rs 1.5 lakh discount in this. Even if you have claimed any deduction earlier under 80C, you will get the maximum benefit of only 1.5 lakh.

You will get exemption from health insurance You can also save tax through health insurance. You can claim premium under section 80D. You get a discount of up to Rs 25,000 in this. If you have got your parents’ health insurance done, then you will get a full tax exemption of Rs 50,000.

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But among all this, the thing that has worked for you the most is that if you are employed, then your company must have started asking for actual investment proof from you, on the basis of which your tax will be deducted. If you haven’t asked yet, you will ask in a few days. But for tax saving you need to prepare well in advance.

Form-16 will be prepared on this basis, you will have to inform your company about what investments you have made since April 1 till now. Based on this, your Form-16 will be prepared. Let us help you in planning for tax saving. As a responsible citizen of the country, it is your duty to pay tax. But it is good for you to save as much tax as you can.

Understand here, how can you save tax?

You can invest the tax saving money for the future of your family or child. From mutual funds to FDs, all investment options are available in the market today. Today we talk about your salary and tax. Even if your salary is Rs 12 lakh, you do not need to pay Rs 1 tax.

It is important to plan properly to save tax, it is necessary for you to plan properly. For this, you can also consult an expert. If money has been deducted from your salary in the company where you have worked, then on the basis of this calculation, you can get back the deducted money by filing ITR in June-July. Let’s see the complete calculation in an easy way…

If your salary is 12 lakhs, then you come under 30 percent tax. Actually, there is a liability of 30 percent on the annual income of more than Rs 10 lakh.

This is the complete math

1. Every company gives salary to its employees in two parts. In a company it is called Part-A and Part-B. Somewhere it is called Part-1 and Part-2. Tax has to be paid on Part-A or Part-1 salary. Usually, on a salary of 12 lakhs, two lakh rupees are kept in Part-B or Part-2. In this way your taxable income has come down to Rs 10 lakh.

2. After this, deduct Rs 50,000 given by the Ministry of Finance as standard deduction. After deducting these, your taxable income comes down to Rs 9.50 lakh.

3. Under Section 80C of Income Tax, you can claim savings of up to Rs 1.5 lakh. In this, you can claim tuition fee, LIC (LIC), PPF (PPF), mutual fund (ELSS), EPF (EPF) or home loan principal etc. Now your taxable income has come down to Rs.8 lakh.

4. Under section 24B of income tax, you get a deduction of two lakh rupees on home loan interest. In this way, your taxable income has come down to Rs.6 lakh here.

5. After this you will have to invest 50 thousand rupees in National Pension System (NPS) under 80CCD (1B) to make the taxable income zero (0). Here the taxable salary has come down to Rs 5.5 lakh per annum.

6. Under Section 80D of Income Tax, you can claim premium for health insurance for children, wife and parents. A premium of up to Rs 25,000 can be claimed for the child and wife. If your parents are senior citizens, you can claim Rs 50,000 as premium. After deducting these two, your taxable income comes down to Rs 4.75 lakh.

Let us tell you that on the income of Rs 2.5 lakh to Rs 4.75 lakh, a tax of Rs 11250 is made at the rate of 5 percent. But there is a tax exemption of up to Rs 12,500 from the Ministry of Finance. In this way your tax liability becomes zero.

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There are many such schemes in the market to save tax. There are some schemes, where returns are guaranteed, but this return will be in single digits only. At the same time, there are some schemes, where there is some risk as compared to the schemes with guaranteed returns, but the returns can be double or even triple. Among these, Equity Linked Savings Scheme (ELSS) of mutual funds is an option. This can help in creating a bigger corpus for the investors in the long term. Let us have a look at some of the top performing income tax saver funds.

SBI Long Term Equity Fund

20 Year SIP Return: 17.16 percent
Value of 1 Lakh Investment in 20 Years: 43.23 Lakh
6000 Monthly SIP Value in 20 Years: 1.03 Crore
Minimum Investment: Rs 500
Minimum SIP: Rs 500
Total Assets: 9878 Crore (As on 30th June, 2022)
Expense Ratio: 1.77% (up to 31st May, 2022)

ICICI Pru LT Equity Fund

20 Year SIP Return: 17%
Value of 1 Lakh Investment in 20 Years: 40.89 Lakh
6000 Monthly SIP Value in 20 Years: 1.02 Crore
Minimum Investment: Rs 500
Minimum SIP: Rs 500
Total Assets: 9072 Crore (As on 30th June, 2022)
Expense Ratio: 1.91% (up to 31st May, 2022)

HDFC Taxsaver Fund

20 Year SIP Return: 16 percent
Value of 1 Lakh Investment in 20 Years: 37.24 Lakh
6000 Monthly SIP Value in 20 Years: 87.50 Lakh
Minimum Investment: Rs 500
Minimum SIP: Rs 500
Total Assets: 8716 Crore (As on 30th June, 2022)
Expense Ratio: 1.83% (up to 31st May, 2022)

Tata India Tax Savings Fund

20 Year SIP Return: 15.6%
Value of 1 Lakh Investment in 20 Years: 29.18 Lakh
6000 Monthly SIP Value in 20 Years: 85.20 Lakh
Minimum Investment: Rs 500
Minimum SIP: Rs 500
Total Assets: 2743 Crore (up to 30th June, 2022)
Expense Ratio: 1.78% (as of 31st May, 2022)

Benefits of investing in ELSS

AK Nigam, director, BPN Fincap, says that most of the schemes in this category have a lock-in period of 3 years, while the returns are high compared to other tax saving schemes. At least 80 per cent of ELSS exposure is in equities. Because of this, the scope for higher returns increases. This has made it a popular tax saving option. Looking at the returns of ELSS, investors have got 12 to 18 percent returns in many schemes in 5 years. The good thing is that even after the completion of the lock-in period, you can continue investing as long as you want. That is, it also promotes long-term investment, through which financial stability can be found in the future.

One can also opt for Systematic Investment Plan (SIP) in ELSS. The profit on investment in ELSS and the amount received from redemption is completely tax free. Long Term Capital Gains (LTCG) on returns up to Rs 1 lakh in 1 year through ELSS are exempted from income tax. However, profit above this limit is taxed at the rate of 10 percent.

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