Avoid last minute IT rush – Income Tax Proof Submission

tax-planning

The end of the financial year 2018-19 is fast approaching, and with that begins income tax woes 😉.

Most people keep the task of tax planning hanging till the end of the year. While doing so many of them get trapped in last minute investment ideas, which seems attractive, but actual calculation, they are not.

A proper tax planning can help you to minimize your tax liability with the help of productive investments.The income tax framework allows various deductions under different heads, which can be used to save tax, as well as link same to attractive returns. Some of the most popular heads are described below.

Section 80C (includes section 80CCC): This section allows taxpayers to claim deduction up to Rs.1.5 lakh per year. Under this section one can claim deductions for a huge list of investments; i.e. PPF, EPF, NSC, Postal, ELSS schemes of Mutual Funds, 5year Bank FD,Life insurance policy premium,Tuition fees (school),Home loan principaletc. Investment in these schemes can potentially save taxes worth Rs. 45,000/-.
To know which one is an ideal investment, click here: http://blog.moneyfrog.in/ask-what-else-elss-for-tax-savings-schemes-80cc/

National Pension Scheme (NPS) (Section 80CCD):Investments in NPS Tier1 account (non-withdrawable up to age of 60) qualifies for additional deduction of Rs.50,000 over and above limit of 80C. It can save taxes upto Rs. 15,000/-.
To know more,click here: http://blog.moneyfrog.in/moneyfrog-school/nps-national-pension-scheme/

Medical Insurance (Section 80D):Section 80D allows deduction of Rs.25,000 for payment of medical insurance premium for self, spouse and dependent child. A deduction of Rs.25,000 for medical insurance premium of parents is also available, if they are less than 60 years of age and in case of parents aged over 60 years, maximum deduction of Rs.50,000 can be claimed.
To know more, click here: http://blog.moneyfrog.in/health-insurance-guide-for-a-secure-future-for-you-and-your-family/

Exemptions for house rent allowance (HRA):HRA forms part of corporate employee’sCTC structure. To avail this exemption, you need to be paying rent for the house you are currently living in, else no deduction can be claimed in this section.The deduction available is the least of the following amounts:a) Actual HRA received; b) 50% of [basic salary + DA] for those living in metro cities (40% for non-metros); orc) Actual rent paid less 10% of basic salary + DA.
To know more, click here: http://blog.moneyfrog.in/moneyfrog-school/house-rent-allowance-hra/

Home Loan Interest (Section 24): As per Section 24, the Income from House Property shall be reduced by the amount of Interest paid on Home Loan where the loan has been taken for the purpose of Purchase/ Construction/ Repair/ Renewal/ Reconstruction of a Residential House Property.The maximum tax deduction allowed under Section 24 of a self-occupied property is subject to a maximum limit of Rs. 2 Lakhs currently.

Leave Travel Allowance (LTA): LTA is given by employers to employees in which employees can claim reimbursement of expenses incurred on travel within India(only). Exemption under this can be claimed for travel of self and family members. The employee needs to submit the actual bills to the company for claiming LTA. The reimbursement of travel costs is limited to the actual expenses incurred on air, rail and bus fares only. It is available for 2 journeys in a block of 4 years. The block applicable for the current period is calendar year 2018-21. These blocks are decided by the income tax department.

TAX PLANNING TRAPS to AVOID, click to know more: http://blog.moneyfrog.in/tax-planning-traps-to-avoid/

Harshada Kadam
Digital Marketing Executive at Moneyfrog.in

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