Tax Saving - How to Save Income Tax For FY 2023-24

Tax savings are an important part of financial planning, allowing individuals and businesses to minimize their tax liability through legal and strategic means. With a clear understanding of available deductions , exemptions, and investment options, one can efficiently reduce their tax liability.

Read more
Save Tax
Upto ₹46,800 Under Sec 80C
Best Tax Saving Plans
  • High Returns

    Get Returns as high as 17%*
  • Zero Capital Gains tax^

    unlike 10% in Mutual Funds
  • Save upto Rs 46,800

    in Tax under section 80 C
We are rated~
rating
6.7 Crore
Registered Consumers
51
Insurance Partners
3.4 Crore
Policies Sold
Get Instant Tax Receipts
Save upto ₹46,800 in Taxes Under Section 80C
+91
Secure
We don’t spam
View Plans
Please wait. We Are Processing..
Your personal information is secure with us
Plans available only for people of Indian origin By clicking on "View Plans" you agree to our Privacy Policy and Terms of use #For a 55 year on investment of 20Lacs #Discount offered by insurance company
Get Updates on WhatsApp
We are rated~
rating
6.7 Crore
Registered Consumers
51
Insurance Partners
3.4 Crore
Policies Sold

What is Income Tax?

Income tax is a tax imposed by a government on the income earned by individuals and businesses within its jurisdiction.

Individuals are typically required to file an income tax return annually, reporting their income from various sources, such as wages, self-employment income, investment income, and other types of income. The tax liability is then calculated based on the individual's total income and applicable tax rates, taking into account any deductions, credits, or exemptions that may be available.

Income Tax Act for Tax Saving 

There are various sections under which you can save income tax in India. The most popular sections are:

  • Section 80C: This section allows you to deduct up to ₹1.5 lakh from your taxable income for investments made in certain financial instruments, such as Public Provident Fund (PPF), Employee Provident Fund (EPF), Unit Linked Insurance Plans (ULIPs), National Pension System (NPS), Equity Linked Saving Schemes (ELSS), and five-year tax-saving bank fixed deposits.

  • Section 80D: This section allows you to deduct up to ₹25,000 from your taxable income for the premiums paid towards health insurance for yourself, your spouse, and your dependent children. If you are paying for your parents' health insurance, you can claim an additional deduction of ₹25,000, up to a maximum of ₹50,000 per year.

  • Section 80E: This section allows you to deduct the interest paid on an education loan for yourself, your spouse, or your children. The deduction is not limited to any specific amount.

  • Section 80G: This section allows you to deduct donations made to certain charitable organizations from your taxable income. The deduction is limited to 50% of the donated amount, up to a maximum of 10% of your total income.

  • Section 80TTA: This section allows you to deduct the interest earned on your savings account deposit up to ₹10,000 from your taxable income.

  • Section 80EE: This section allows first-time home buyers to deduct the interest paid on a home loan up to ₹50,000 from their taxable income. The loan must have been taken between April 1, 2019, and March 31, 2022, and the value of the house should not exceed ₹50 lakh.

  • Section 80EEA: This section allows first-time home buyers to deduct an additional ₹1.5 lakh from their taxable income for the interest paid on a home loan. The loan must have been taken between April 1, 2019, and March 31, 2022, and the value of the house should not exceed ₹45 lakh.

What are the Best Ways to Save Tax Under Section 80C?

Section 80C of the Income Tax Act, 1961, provides for deductions from taxable income for certain specified investments and expenses. The maximum limit for deductions under Section 80C is INR 1.5 lakh per financial year. Here are some of the best ways to save tax under Section 80C:

  • Unit Linked Insurance Plan (ULIPs): ULIPs are eligible for tax benefits under Section 80C of the Income Tax Act, 1961. The premiums paid towards a ULIP are eligible for a deduction from taxable income up to a maximum limit of INR 1.5 lakh per financial year.

  • Equity-Linked Savings Scheme (ELSS): ELSS is a type of mutual fund that invests in equity and equity-related instruments. It has a lock-in period of three years, which is the shortest among all 80C options.

  • Public Provident Fund (PPF): PPF is a long-term savings scheme offered by the government. It has a lock-in period of 15 years, and the interest earned is tax-free.

  • National Savings Certificate (NSC): NSC is a fixed-income investment scheme offered by the post office. It has a lock-in period of five years.

  • Life Insurance Premium: Premiums paid for life insurance policies are eligible for deduction under Section 80C.

  • Employee Provident Fund (EPF): Contributions made to the EPF by an employee are eligible for deduction under Section 80C.

  • Sukanya Samriddhi Yojana (SSY): SSY is a government-backed savings scheme designed to encourage savings for the education and marriage of a girl child.

  • Senior Citizens Savings Scheme (SCSS): SCSS is a savings scheme for senior citizens, offering regular income with tax benefits.

  • Fixed Deposit (FD): Tax-saving fixed deposits with a lock-in period of five years are also eligible for deduction under Section 80C.

  • Home Loan Principal Repayment: The principal amount repaid on a home loan is eligible for deduction under Section 80C.

  • Tuition Fees: Tuition fees paid for the education of two children are eligible for deduction under Section 80C.

Invest & Save upto ₹46,800 per annum in taxInvest & Save upto ₹46,800 per annum in tax

Other Ways to Save Taxes

When it comes to saving on income taxes in India, there are numerous legal avenues available to individuals and businesses. Some other ways to save taxes are: 

  • Charity Donations: Donations to specific relief funds and charity organizations are eligible for tax deductions under Section 80G.

  • Health Insurance Premium: Deduct up to Rs 25,000 for health insurance premiums for yourself, your spouse, and dependent children. Additional deductions are available for parents' premiums.

  • Savings Account Interest: Interest earned on savings accounts is tax-exempt up to Rs. 10,000. For senior citizens, this limit is increased to Rs. 50,000 under Section 80TTB.

  • Agricultural Income: Income from agriculture is exempt from income tax.

  • Specific Disease Treatment Expenses: Medical expenses for specific diseases are eligible for tax deductions under Section 80DDB.

  • Inheritance: Money received through inheritance is tax-free as India does not have an inheritance tax.

  • Section 80C Investments: Invest up to Rs. 1,50,000 in tax-saving instruments under Section 80C to reduce your tax liability.

  • Disabled Dependent Expenses: Deduct up to Rs. 75,000 for expenses related to a disabled dependent under Section 80DD.

  • Business Expenses: Business owners can claim travel expenses as part of business costs to reduce their tax liability.

  • Hindu Undivided Family (HUF): HUFs are eligible for separate tax exemptions and a basic tax exemption of Rs. 2.50 lakh.

  • Political Party Donations: Donations to political parties are eligible for a 100% tax deduction under Section 80GGC and 80GGB.

  • Education Loan: Interest paid on student loans is tax-deductible under Section 80E, with no upper limit.

  • Wedding Gifts: Wedding gifts from direct relatives are tax-exempt. Gifts from friends or unrelated individuals are tax-exempt up to Rs. 50,000.

  • NRE Account Interest: Interest earned on Non-Resident External (NRE) accounts is tax-free.

  • Educational Scholarships: Scholarships awarded to students are exempt from income tax under Section 10(16).

What are the Investment Options Available Under 80C?

Investment Lock-in Period Returns
Unit Linked Insurance Plan (ULIP) 5 years Varies with Plan Chosen
ELSS Funds 3 years 15% to 18%
5-Year Bank Fixed Deposit 5 years 6% to 7%
Sukanya Samriddhi Yojana (SSY) N/A 7.60%
Senior Citizen Saving Scheme (SCSS) 5 years 7.40%
Public Provident Fund (PPF) 15 years 7% to 8%
National Savings Certificate 5 years 7% to 8%
National Pension System (NPS) Till Retirement 12% to 14%

Conclusion

There are numerous ways to legally save on income tax in India for the financial year 2023-24. By taking advantage of the various exemptions, deductions, and benefits provided under the Income Tax Act, individuals and businesses can significantly reduce their tax liability. 

FAQ's

  • How to save tax on 10 lakh salary?

    To save tax on a salary of 10 lakhs in India, you can claim the same tax deductions as mentioned above. However, you may not be able to claim all of the deductions, depending on your individual circumstances.

    For example: if you do not have any health insurance premiums to pay, you will not be able to claim a deduction under section 80D. You can use an income tax calculator to estimate how much tax you can save by claiming various tax deductions.

  • How much tax can I save?

    The amount of tax you can save depends on your individual circumstances, such as your salary, income tax bracket, and the tax deductions you claim.

    However, as a general rule of thumb, you can save up to 30% of your income tax liability by claiming all of the eligible tax deductions.

    For example: if your income tax liability is ₹1 lakh, you can save up to ₹30,000 by claiming all of the eligible tax deductions.

  • How can I file my income tax return online?

    To file your income tax return online, you can visit the official website of the Income Tax Department of India. You will need to create an account and then log in to file your return.
  • What is the best ways to save tax?

    Below enlisted are few of the best ways to save taxes in India:
    • Investments made under Section 80 C for an amount of up to Rs 1.5 lakhs against PPF, home loan, etc.

    • Investments made under Section 80D for medical insurance. Can claim a deduction of up to Rs 25,000

    • Investments made under Section 80EE against home loan interest and claim a deduction of up to Rs 50,000.

  • Why do we save tax?

    We save on taxes to make sure that our hard-earned money remains with us and we don’t end up paying a major part of it to the government.
  • Where should I invest to save income tax?

    Below enlisted is the best and top 10 investment avenues in India:
    • PPF (Public Provident Fund)

    • Life Insurance Plans

    • Health Insurance Plans

    • ELSS (Equity Linked Savings Scheme)

    • Bank FD (Fixed Deposit)

    • National Pension Scheme (NPS)

    • Senior Citizen Savings Scheme

    • EPF (Employee Provident Fund)

  • How can I save tax other than 80c?

    While investments made under section 80C are undoubtedly the best to help you achieve your tax saving purposes, there are still many other investment options that can help you save on taxes.

    Below-enlisted are the 7 best tax saving options other than Sec 80C.

    • National Pension Scheme (NPS)

    • Interest on education loan (Section 80E)

    • Rajiv Gandhi Equity Savings Scheme (Section 80CG)

    • Home Loans

    • House rent allowance (Section 80GG)

    • Health Insurance (Section 80D)

    • Medical treatment under Sec 80DDB

    • Donations (Section 80G)

  • How can I save income tax?

    Here are few deductions that can help you save income tax in India:
    • Deduction on rent

    • Deduction on higher education loan

    • Deduction on donations

    • Deduction for physical disability

    • Deduction on kids’ tuition fees

    • Deduction on expenses incurred on specified diseases’ treatment such as AIDS, Cancer, etc.

    • Deduction on bank savings account’s interest

    • Deduction on personal loan interest (taken for the purpose of house purchase)

    • Deduction on interest paid on the loan for revamp/reconstruction of home

    • Deduction on Long-term Capital Gains (LTCG) investments under Section 54 and 54F

  • What are the taxes saving instruments?

    Tax-saving instruments are great financial avenues that effectively participate in various financial needs of an individual’s life. The role of tax-saving instruments is not limited to saving taxes only; rather they do much more than that.

    Besides some tax-free expenses, these instruments majorly consist of tax-saving investments which range from pure equity to pure debt instruments.

  • How much money can save on taxes?

    The Income-tax Act of India has a number of sections that taxpayers can use to reduce their taxes. The most common sections in Income Tax Act are 80C, 80CCD (1B), 24 (b) and 80D.

    However, every section amongst these has a pre-set maximum investment amount. This maximum investment amount is decided by the government. Based on the income tax slab an individual falls into, they do their maximum tax saving.

    For instance, an individual paying 20% of her/his income as tax will save around Rs 20,000 on an investment of Rs 1 lakh; whereas an individual in the 30% bracket will save Rs 30,000 on the same investment.  

*All savings are provided by the insurer as per the IRDAI approved insurance plan.
*Tax benefit is subject to changes in tax laws. Standard T&C Apply
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ

Income Tax articles

Recent Articles
Popular Articles
Section 80EEA - Deduction for Interest on Home Loan

05 Jun 2024

Section 80EEA of the Income Tax Act provides a significant tax
Read more
Section 80CCE of the Income Tax Act

29 May 2024

Section 80CCE of the Income Tax Act provides taxpayers with
Read more
Section 80CCC of the Income Tax

06 May 2024

Section 80CCC, part of the broader 80C category in the Income
Read more
Income Tax Proof

28 Feb 2024

Income tax proofs play an important role during tax assessment
Read more
How to Save Tax on 9 Lakhs Salary

22 Feb 2024

It is stressful to let taxes eat up your hard-earned money. This
Read more
Deductions in New Tax Regime Under Union Budget 2023-24
There are no major changes made when it comes to deductions in the new tax regime under the recent Union Budget
Read more
What is Form 16 & How to Download It
Form 16 is a significant document provided by employers in India to their employees,  which serves as proof of
Read more
Leave Encashment Tax Exemption - Section 10(10AA)
Leave Encashment Tax Exemption under Section 10(10AA) provides a significant financial benefit for employees
Read more

top
Close
Download the Policybazaar app
to manage all your insurance needs.
INSTALL