Taxes are unavoidable, but it’s not your fault – which brings us to this article on claiming the appropriate deductions. A blog article containing information and advice on tax deductions you can take advantage of today to help lower your Income Tax liability. Save money with these key tips!
New Concessional Tax Regime for Individual and HUF in India
From FY 2020-21 onwards, the government has implemented a new simplified optional personal income tax regime for Individuals & HUF.
Individuals and HUFs are allowed to pay income tax at reduced slab rates that are applicable without certain exemptions and deductions if certain requirements are met. As a result, one can compare the tax payments under the existing and new tax regimes and choose the one that is more tax advantageous and help save more income tax.
Benefits on Purchasing New House
If you are considering purchasing a new house in India, there are many income tax benefits to take into account. Here are three key deductions you can claim on your tax return: Principal Repayment and the home loan interest deduction.
For the purchase or construction of a home, a home loan is required. If the loan is for the construction of a residence, it must be finished within five years of the end of the Financial year in which the loan was received.
Section 24 of the Income Tax Act, 1961 allows you to deduct the interest portion of your EMI paid for the year from your total income up to a maximum of Rs 2 lakhs.
The maximum deduction for interest paid on self-occupied house property is Rs 2 lakhs starting with the assessment year 2018-19.
However, the total amount that can be claimed under the heading of “House Property” is limited to Rs 2 lakh. This deduction is available beginning with the year in which the house property is constructed.
Increase the monthly contribution to Retirement Funds in India
There are a few simple things you can do to increase your monthly retirement contribution in India without having to shell out too much cash up front. Also, you can also take advantage of Income Tax Deductions available to you.
Increasing contributions for the retirements funds not only helps in tax savings but you can also have access to these savings for the period when it is actually needed.
Save Taxes on Charity and Donations
In India, charitable donations are deductible under Section 80G of Income Tax Act.
Charity is an important part of society. It helps to improve the lives of people who are less fortunate. In India, charitable donations are deductible under Section 80G of Income Tax Act. This means that you can save tax on your donations.
To qualify for a deduction under Section 80G of Income Tax Act, you must make a donation to a qualifying charity. A qualifying charitable Institute/Trust/Society is one that meets the following conditions:
1) It is registered with the government.
2) It is a voluntary organisation.
3) The main purpose of the charity is to benefit society as a whole.
Donations made to a qualifying charitable Institute/Trust/Society are treated as if they were made directly to the government. This means that you can save tax on your donation by claiming it as a deduction from your taxable income.
There are several ways to make your donations tax efficient. You can make your donation through an online fund-raising website or through a financial institution. You can also make your donation in cash or by using a gift card.
Claim your Telephone & Internet Expenses
One deduction that many people may not be aware of is the deduction for telephone expenses. You can deduct the cost of your regular phone bill, including taxes and fees, from your taxable income. This includes both landline and mobile phone bills.
Employee telephone reimbursement is not taxable under the Income Tax Rules, Rule 3(7) (ix). As a result, if your job needs you to use a mobile phone or the internet, you can save money on taxes. To take advantage of this tax-saving opportunity, you must provide original bills to your employer.
You should consult Taxzona (A Tax Consultant in Mumbai) to explore more such uncommon ways of saving of what is Income tax.
