Tax Planning

The kind of investment you intend to make throughout the fiscal year will determine whether you are required to pay taxes. A few of the investment categories for which you will be subject to taxes are listed below:
a. Capital gains: If you sell part of your investments for a profit, you will have to pay taxes.
b. Tax on interest: You must be cautious while investing in money or goods to avoid paying this tax. Sometimes interest paid on certain items is taxable, whereas other schemes are tax-free.
c. Dividends and other income types: If people make money from selling their investments, renting out their homes, or receiving other sorts of income, they must pay interest on dividends.

There is no cap on the number of tax-free investment products that individuals can purchase. Investors must keep in mind, though, that there is a cap on the amount of deductions that can be used to claim tax benefits. You must consult several sections of the Income Tax Act in order to understand these limitations.

According to Section 80C of the Income Tax Act of 1961, the maximum amount of money you can invest is Rs 1,50,000 of your total taxable income.

By investing in government-approved tax-free investment vehicles, individuals can lawfully lower their taxes.

People are constantly searching for methods to reduce their tax obligations. A few strategies to lower your taxable income in India are listed below:
a. Deduct your income tax-saving expenses
b. Invest in tax-saving products specified in Section 80C of the Income Tax Act
c. Take advantage of the tax deduction on your home loan
d. The money from a life insurance policy is tax-exempt when it matures or when the claim amount is received. Generally speaking, premiums for insurance issued before to April 1, 2012, should not exceed 20% of the sum covered. The premium for plans issued after April 1, 2012, shouldn't be more than 15%.
e. Monitor your long-term capital gains because they are subject to 10% tax if they surpass Rs 1 lakh.
f. Section 80D exempts a specific amount of money paid for health insurance premiums from taxes. Furthermore, the premiums paid for senior health insurance can result in further tax savings.

There are a few expenses you might be able to claim if the receipt is lost, even though it is ideal to have a receipt for every expense you incur and wish to report on your tax return.
a. Fuel or fuel costs, if you can specify how many kilometres you are claiming;
b. Computer equipment, if you can provide a credit card statement with a note attached.
c. Stationery items, if you are able to provide a credit card statement along with a note.
d. Dues for membership, if you can provide proof.

Introduced last year and included in Budget 2023-2024, the new tax system is now optional and will continue to coexist with the current system. Under the Income Tax Act, a taxpayer is eligible for a number of tax exemptions and deductions. Tax exemptions and deductions that are frequently used include the Section 80C, normal, and Section 80D deductions, as well as the tax exemption on house rent allowance and leave travel allowance.

The following five suggestions will help you reduce your tax outflow and increase your tax refund:
a. Make the most of your contributions under Section 80C since taxpayers can claim up to Rs 1.5 lakh in tax benefits on expenses like house loans, university fees, PPF, National Saving Certificates, ELSS, etc.
b. In addition to the benefits under Section 80C, take advantage of Section 80D by claiming a deduction when paying medical insurance premiums.
c. Examine home loan tax advantages under Section 80EE and Section 24 of the Income Tax Act.
d. Taxpayers who create a savings account at a bank, post office, or cooperative society may deduct up to Rs 10,000 from interest income.
e. Even if you do not receive HRA from your employer, you are still eligible to claim the deduction under Section 80GG.

To save more money, taxpayers might choose tax-saving measures like the National Pension Scheme or the pension plans offered by life insurance companies. Additionally, there is the option to use Section 80D tax deductions from total taxable income to pay for any medical bills and the premiums for health insurance plans. Additionally, one can claim a tax deduction under Section 24 of the Income Tax Act on the interest component of their home loan or receive a tax benefit under Section 80E on the repayment of the interest component of an education loan.

Section 80C of the Income Tax Act offers some of the most well-liked tax-saving options. Under this section, people can deduct up to Rs 1.5 lakh from a variety of investments and expenses in a given fiscal year, including home loans, health insurance plans, government programs, and life insurance plans, among other things.

This specific section relates to the deductions that people can take from their contributions to the Atal Pension Yojana or National Pension Scheme. Those whose employers contribute to the National Pension Scheme are also eligible for this benefit.

Individuals are permitted to claim up to Rs 25,000 for medical insurance premiums per fiscal year under Section 80D of the Income Tax Act, 1961. An additional advantage is the deduction of Rs 5,000 for any costs related to preventive medical examinations. Senior citizens are eligible for a larger discount.