Planning for the fiscal year and taxes
Income tax is based on the amount of money you make in a given year. As the fiscal year 2020-21 approaches, now might be a good time to start thinking about how much TAX you can save. Starting this year, you can choose between the old tax system, which offers tax benefits, and the new tax regime, which offers lower tax rates but no tax benefits. If you stick with the old system, here’s how you can save money this fiscal year.
80C, 80CCC, and 0CCD are all parts of the Internal Revenue Code.
In these lines, you can save Rs 1.5 lakhs on your taxable income. This includes payments for life insurance premiums, 5-year bank fixed deposit investments, public provident fund, national saving scheme, national pension scheme, home loan principal payments, and equity-linked savings schemes, among other things. Contributions to a life insurance annuity scheme and the central government’s pension fund are also eligible for a deduction.
Section 80D of the Specification
Health insurance premiums are deducted from your income. It can be up to Rs 25,000 in most cases and up to Rs 50,000 for senior citizens. If both the TAX payer and the people are above 60, the cumulative deduction is Rs 1 lakh. Also, there is a Rs 5,000 deduction for health check-ups.
DDB and Section 80DD
Amount expended on or donated to a designated scheme to cover a dependent disabled relative’s medical costs or oneself is deductible. Under the two sections, this can go up to Rs 1.25 lakhs and Rs 1 lakh, respectively.
Section 80TTA under this clause
Claim a deduction of up to Rs 10,000 on interest earned on your savings bank account under this clause. The other sections are concluded here :
Under section 80G, this clause allows you to demand a deduction if you pay rent but do not receive House Rent Allowance. The maximum deduction is determined using the formula given in Section 80E, the interest paid for a higher education loan deducted. Section 80EE, the interest component of a home loan, deducted up to Rs 50,000 for first-time homebuyers. In Section 80U, a resident who has a physical disability is eligible for a Rs 75,000 deduction. In the event of severe impairment, this amount will rise to Rs 1.25 lakhs.In Section 80G, donations to designated social causes are eligible for a 100 per cent deduction with no qualifying cap. There are a few other funds that will enable you to deduct 50% of your donations. In section 80GGC, this clause allows you to exclude any non-cash donation you make to a political party. In Section RRB, this clause allows you to exclude income earned as a result of a patent royalty. In Section 80TTB, senior citizens can subtract up to Rs 50,000 from their deposit income.
Exemptions from taxes
Aside from deductions, you can save money on taxes by taking advantage of provisions such as House Rent Allowance, Transportation Allowance, Child Education Allowance, Hostel Subsidy, and interest on home loans. We hope you save a lot of money on your next tax return now that you have this detail.