I hope the financial year (FY) 2022–2023 went well. It is about to end. But let me know one thing whether it was good in the case of your income-tax planning. NO? Most of us are thinking about our income-tax planning till the last date of the financial year and end up paying taxes on our hard-earned money, which we can save. Are you an employee? Have you submitted your investment proofs to your employer? You must know that your employer will deduct higher TDS on Salary
income if you do not submit your investment proofs.
Although the deadline for such submissions varies, most companies require that you submit proof by March 15.
Even after investing under 80C and other savings, it is disheartening to continue paying high taxes. But when you file your income tax returns
, the Income Tax Department will still refund you. Isn't that great? Let's look at the exemptions and deductions you can still use even though the deadline for submitting your taxes documentation to your employer has passed. Don't worry; the deductions and exemptions also apply to non-salaried people. Following is a list of tax laws that could legally lower your taxes for the current financial year:
1: Eligible deductions under Section 80C
, in which you can claim deductions upto Rs.150000-
* Life Insurance
Securing your family with a term insurance plan is one way to ensure your family's financial future after you pass away. But did you know that the premiums you pay for these life insurance policies also help you save money on taxes? Yes, life insurance premiums are available as a deduction under section 80C.
* Public Provident Fund (PPF)
Section 80C allows for tax deductions on yearly PPF contributions. PPF is a Government-backed scheme that provides you with adequate returns. Under this scheme, you can invest a minimum of Rs. 500 and a maximum of Rs 1,50,000 every year. It has a lock-in period of 15 years.
* Tax Saving Fixed Deposit
Bank fixed deposits have a 5-year lock-in period during which early withdrawal is not permitted, but they are still eligible for Section 80C deductions. The Interest on a five-year fixed deposit is taxable and not eligible for tax breaks. Section 80C allows for a tax deduction on investments of up to 1.5 lakhs. It can be opened by Indian residents who can benefit from interest rates ranging from 5.5% to 7.75%, depending on the bank. The minimum investment amount for FDs is Rs.1,000, and all interest income from FD investments is subject to taxation.
* Senior Citizens Savings Scheme (SCSS)
This programme is only intended for elderly adults, those at least 60 years old or who have chosen to retire at age 55.
A minimum deposit of Rs. 100 is required to purchase a National Savings Certificate (NSC). An NSC's investment tenure is five years. You might demand the entire sum be returned to their account upon maturity. If the money is unclaimed, it is all reinvested into the plan. You can earn 7.4% interest.
* Sukanya Samriddhi Yojana
Our sole objective of this tax-saving strategy is to promote the development of young girls. This savings programme is for a young girl who qualifies for tax benefits. The girl's parents or legal guardians are permitted to open an account under this scheme until ten. When there are twins, the programme is expanded to include a third child and is open to two girls' kids. The amount needs to be deposited over 15 years, and it matures in 21 years. The annual interest rate is 7.60%. A minimum investment of 250 rupees and a maximum investment of 15 lakhs are permitted. The plan has a 21-year maturation time.
2: Section 80D: Medical Insurance Premium
Section 80D allows claiming deductions from the gross Taxable Income for the payment of medical insurance premiums. You are permitted to deduct up to Rs. 25,000 annually if you pay for medical purposes for self, spouse or children. The maximum deduction for medical insurance premiums for senior citizens is Rs. 50,000. Also, if you spend the money on behalf of your parents, then you can get a maximum deduction of up to Rs. 25,000.
3: Section 80G: Charitable Donations
You can claim 50% to 100% of the total amount donated to the charitable trust. To avail deduction, you need to preserve the receipt from the organisation after the financial year. Ensure that whenever you donate money to charities or trusts, check if they are registered under Section 12A post, which they qualify for the 80G certificate. Any cash donations exceeding Rs 2,000 will not be allowed as a deduction, and donations over Rs.2000 should be made via any mode other than cash. A tax deduction of up to Rs. 1,50,000 may be claimed for contributions paid to the PF account under section 80C of the income tax act.
4: Section 80GG: Rent Contributed to Housing
Under section 80GG, people who are renting a home can make deductions. However, those who are not salaried and those employees who do not receive a House Rent Allowance from their employers are eligible for this tax deduction.
5: Health Insurance under Section 80D
Nowadays, with the cost of medical treatment growing, everyone must get health insurance. Because it helps you pay for your medical bills in an emergency, you can save up to Rs. 15,000–20,000 under section 80D if you pay premiums for your health insurance.
6: Education Loans under Section 80E.
The Interest paid on student loans for higher education is still tax-free for the borrower, the spouse, and the children under Section 80E. Not the principal amount, but the amount of Interest paid, may be deducted by an individual.
7: Home Loans under Section 80EE
Home loans are one of the best strategies to lower taxes in India. Under the current arrangement, home loans have assisted in reducing taxable income. First-time house buyers may deduct up to Rs. 50,000 off the Interest on a home loan throughout a fiscal year by using Section 80EE.
8: Section 80TTA: Interest on Saving Accounts.
Under Section 80TTA, Interest accrued on savings accounts is deductible. However, any interest earned on a savings account over Rs. 10,000 will be considered taxable income.
So, in the end, persons who have invested, kindly submit your proofs timely and those who haven't, make your investments before the end of Feb for your convenience. Still, if you are an employee and missed your deadline to submit your proofs to your employer, then you can claim in your income tax return for FY 22-23
and take the refund.
Take control of your income tax planning and maximize your savings. Explore the various deductions and exemptions available to reduce your tax burden. For more Information, Contact us today at firstname.lastname@example.org
The information given in this article is for general guidance to the readers. This information should not be sought as a substitute for legal opinion