5 Legal Ways To Save Income Tax

The Indian Income Tax Act allows for certain deductions which can be claimed to save tax at the time of filing of Income Tax Return by all classes of Taxpayers (i.e. Salaried Individuals, Professionals, businessman etc). These deductions which help in saving tax are only available if the taxpayer has done proper tax planning during the year.

If an Individual has done proper Tax Planning to save tax, such deductions would be subtracted from the gross total income and income tax would be levied on the balance income as per the income tax slabs in force.

* Tuition fees

We often spend a considerable amount of our income to provide best education to our kids. I-T laws provide you opportunity to compensate the expenses you incur on their tuition fees by reducing your taxes. You can claim this deduction u/s 80C of I-T Act.

* House Rent

If you look at your salary carefully you will find that it has a component called HRA. This allowance can be claimed as a tax deduction, if you live in a rented place. Don’ t worry if you don’ t get HRA in your salary as you can still get tax benefit as per the provisions of section 80 GG of I-T Act.

* Repayment of home loan

You will be glad to know that the burden of your home loan EMIs can reduce the burden of taxes. You can get the benefit on both principal & interest component of your instalments. You can get a deduction on home loan interest repayment under section 24 of the Income Tax Act and a deduction on the principal amount under section 80C. If you are a new home buyer or paying for your first house, then you can save even greater amount of tax.

* Repayment of education loan

Due to rising costs of educational courses, people often go for education loans when it comes to higher education. Just like deduction available on tuition fees, your education loan EMIs also bring tax benefits to you.

* Travel Expenses

LTA is another component of your salary which can fetch you tax benefits. LTA concession can be claimed for two journeys in a block of 4 years. Expenses incurred by you & your family on travel for which your employer gives LTA can be claimed as deduction.