Income Tax Act provides certain avenues to save tax by investing funds in specified securities like PPF, LIC premiums, fixed deposits, ELSS , ULIP, NSC, etc; Income Tax Saving: Just 1 Day Left For March 31 Deadline, Know What Experts Say
You can claim certain income tax deductions under different heads and therefore reduce your overall income tax liability. Section 80C of the Income-tax Act, 1961 is one of the most widely used deductions that offers a deduction of up to Rs 1.5 lakh in each financial year. But, there are others deductions as well that you can claim and lower your income tax outgo. Check what are the deductions that you can claim in FY2023-24.
The most popular way to save income tax is through Section 80C, but most savings plans fall within its purview, offering a deduction of only up to 1.5 lakh rupees. However, there are several options where investing won't incur any deductions.
Under the new provision, policies issued on or after April 1, 2023, will be exempted from tax only if the total aggregate premium does not exceed Rs 5 lakh annually.
(Tax-savings are inclusive of cess at 4 per cent) Alternatively, suppose your gross total income for FY 2020-21 is Rs 10.5 lakh. By claiming a deduction of Rs 1.5 lakh under section 80C, your net taxable income reduces to Rs 9 lakh. By claiming the deduction, you will now be in the 20% tax bracket instead of the 30% bracket. 5 popular investment avenues for tax deduction under Section 80C Autoplay1 of 7 Commonly-availed tax-savers One of the most common deductions available under the Income-tax Act, 1961 is section 80C. The deduction under 80C can be claimed only if an individual opts for the old/existing tax regime in a financial year. If he/she opts for the new concessional tax regime, then he/she will not be eligible to claim these deductions.
Synopsis Deduction under section 80C of the Income-tax Act, 1961 can reduce up to Rs 1.5 lakh from the gross total income in a financial year. Here is how this section works and can help you save tax in a financial year. Getty Images Eligible investment instruments include Employees Provident Fund (EPF), Public Provident Fund (PPF) etc. One of the most common deductions available under the Income-tax Act, 1961 is section 80C. The deduction under this section can be claimed only if an individual opts for the old/existing tax regime in a financial year. On the other hand, if an individual opts for the new concessional tax regime, then the individual will not be able to claim deduction under this section.