Investment

Published: Apr 4, 2023
Updated: Apr 4, 2023

Ways to save your income tax in the new financial year

Saving income tax is a priority for many taxpayers, and there are several ways to do it. Here are 5 ways to save your income tax:

1.Invest in tax-saving instruments:

The government offers several tax-saving instruments like Public Provident Fund (PPF), National Savings Certificate (NSC), Equity-Linked Savings Scheme (ELSS), etc. Investing in these instruments can help you save taxes under Section 80C of the Income Tax Act.

2.Claim deductions:

You can claim deductions for expenses like medical insurance premium, tuition fees for children, interest paid on a home loan, etc. These deductions are allowed under various sections of the Income Tax Act, and they can help reduce your taxable income.

3.Split income with family members:

If you have income-generating assets like property or investments, you can split the income with your family members like spouse, children, etc. This can help you save taxes as each individual is allowed a basic exemption limit.

4.Make donations:

Donations made to certain charitable institutions are eligible for tax deduction under Section 80G of the Income Tax Act. This can help you save taxes while contributing to a good cause.

5.Opt for the new tax regime:

The government has introduced a new tax regime where taxpayers can forego deductions and claim a lower tax rate. This can be beneficial for taxpayers who do not have many deductions to claim.

There are several ways to save income tax, and it is important to plan your finances and investments accordingly. You can consult a financial advisor or tax expert to help you make the most of these tax-saving options.