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Everybody hates paying taxes and at all times are on lookout for Choices to Save Tax. Nonetheless the revenue tax guidelines in India are difficult and its turning into extra so in recent times. Funds 2020 launched the idea of New Tax Regime, then there have been a number of modifications to the legal guidelines in 2020. Fortunately Funds 2021 has been much less occasion full with very minor tweaking to the revenue tax guidelines. On this put up we attempt to discover – What’s the Most Earnings Tax I can save for FY 2021-22?
To make it easy, we’ve listed all of the tax saving tax sections within the desk under. This may make it easier to examine you probably have taken benefit of the related part. We have now additionally printed eBook which tells you about all choices to avoid wasting tax which can be accessible to a person (each salaried & enterprise).
Choices to Save Tax for FY 2021-22
Broadly talking If you’ll be able to avail all these sections you can also make greater than Rs 14 Lakhs revenue tax free. However sadly not all sections can be relevant for you. The desk under offers the main points of all of the tax exemptions accessible:
| S. No. | Tax Sections | Description | Most Tax Exemption Restrict (Rs.) |
|---|---|---|---|
| 1 | 80C/ 80CCC/ 80CCD | Funding in EPF, ELSS, PPF, FD, NPS, NSC, Pension Plans, Life Insurance coverage, SCSS, SSA and NPS. Additionally consists of Dwelling Mortgage Principal compensation, Tuition Charges, Stamp Responsibility. Finest Tax Saving Investments u/s 80C | 1,50,000 |
| 2 | 80CCD(1B) | Funding in NPS (Must you Make investments Rs 50,000 in NPS to Save Tax u/s 80CCD (1B)?) | 50,000 |
| 3 | 24 | Curiosity paid on Dwelling Mortgage for Self occupied properties. You’ll be able to declare declare Tax Profit on each HRA & Dwelling Mortgage – Know How? | 2,00,000 |
| 3 A | 80EEA | Extra Tax Deduction of Rs 1.5 lakhs on dwelling loans on buy of reasonably priced dwelling (topic to sure situations) | 1,50,000 |
| 4 | 80EEB | Extra tax deduction of Rs 1.5 lakhs for cost of curiosity on auto mortgage taken for buy of electrical automobiles | 1,50,000 |
| 5 | 80E | Curiosity paid on Training Mortgage. No Restrict – Rs 50,000 is simply an assumed worth Tax Profit on Training Mortgage (Sec 80E) | 50,000 |
| 6 | 80D | Premium cost for medical insurance coverage for self and oldsters. Consists of Rs 5,000 restrict for preventive well being checkup Making Sense of Tax Profit on Well being Insurance coverage u/s 80D | 60,000 |
| 7 | 80DDB | Remedy of Severe sickness for self and dependents (Restrict of Rs 1,00,000 for Senior Residents and Rs 40,000 for others) | 80,000 |
| 8 | 80U | Bodily Disabled Tax payer (Rs 75,000 for 40% to 80% incapacity and Rs 1,25,000 for greater than 80%) | 1,25,000 |
| 9 | 80DD | Bodily Disabled Dependent (Rs 75,000 for 40% to 80% incapacity and Rs 1,25,000 for greater than 80%) | 1,25,000 |
| 10 | 80G | Donation to authorized charitable funds like Prime Minister Aid fund, and so forth (assumed worth) | 50,000 |
| 11 | 80GGA | Donations for scientific analysis or rural growth (assumed worth) | 50,000 |
| 12 | 80GGC | Donations to political events (assumed worth) | 50,000 |
| 13 A | 80TTA | Curiosity acquired in Financial savings Account Which financial institution gives highest rate of interest on financial savings account? | 10,000 |
| 13 B | 80TTB | Curiosity Earnings for Senior Residents Solely Study all about Part 80TTB | 50,000 |
| 13 C | 10(15)(i) | Curiosity as much as Rs 3,500 for single holder account and as much as Rs 7,000 for joint account in Put up Workplace Saving Account | 7,000 |
| 14 | 80GG | For Hire Bills who do have HRA part in wage Methods to Declare Tax Profit for Hire Paid u/s 80GG? | 60,000 |
| Most Tax Exemption Potential (Rs.) | 14,37,000 |
The Downside
Although 14 Lakhs sounds massive quantity however most individuals would avail solely few of the above. Right here is the explanation:
- Rs 1.5 Lakhs exemption for donation: Individuals donate for a trigger and their ardour/empathy and to not save taxes. It’s simply that tax exemption sweetens the deal!
- Rs 2.5 Lakhs exemption on account of tax payer or his dependent being bodily disabled. This can be a a lot wanted exemption however applies to only a few tax payers.
- Rs 1,00,000 deduction for therapy of significant sickness is one thing that only a few tax payers would reap the benefits of.
So out of Rs 14 lakhs, round 5 lakhs exemption can be claimed by only a few tax payers and in particular instances solely.
Most tax payers even after utilizing all of the tax saving sections would be capable of declare tax profit as much as Rs 6 to six.5 Lakhs.
Tax Saving Sections Choices to Save Tax for FY 2021-22
Beneath is the recap of all tax saving sections:
Part 80C/80CCC/80CCD: Funding in EPF, ELSS, PPF, FD, NPS, NSC, Pension Plans, Life Insurance coverage, SCSS, SSA and NPS. Additionally consists of Dwelling Mortgage Principal compensation, Tuition Charges, Stamp Responsibility (Finest Tax Saving Investments u/s 80C)
Part 80CCD(1B): Funding in NPS (Must you Make investments Rs 50,000 in NPS to Save Tax u/s 80CCD (1B)?)
How a lot Taxes you Have to Pay this Yr? Obtain Our Earnings Tax Calculator to Know your Numbers
Have you learnt how a lot tax you must pay for the 12 months? Have you ever taken advantage of all tax saving guidelines and investments? Must you use the “NEW” tax regime or proceed with the previous one? In case you have got all these questions simply Obtain the Free Excel Earnings Tax Calculator for FY 2021-22 (AY 2022-23) and get your solutions.
Part 24: Curiosity paid on Dwelling Mortgage for Self occupied properties. Funds 2017 has capped the restrict to Rs 2 Lakhs for each rented and self-occupied home. You’ll be able to declare declare Tax Profit on each HRA & Dwelling Mortgage – Know How?
Part 80EEA: Extra exemption on Dwelling Mortgage Curiosity for First time dwelling consumers. (Funds 2019)
Part 80EEB: Extra tax deduction of Rs 1.5 lakhs for cost of curiosity on auto mortgage taken for buy of electrical automobiles. (Funds 2019)
Part 80E: Curiosity paid on Training Mortgage. No higher/decrease Restrict! (Tax Profit on Training Mortgage (Sec 80E))
Part 80CCG: Funds 2017 eliminated this tax exemption for RGESS
Part 80D: Premium cost for medical insurance coverage for self and oldsters. Additionally consists of Rs 5,000 restrict for preventive well being checkup (Making Sense of Tax Profit on Well being Insurance coverage u/s 80D)
Part 80DDB: Remedy of Severe sickness for self and dependents (Restrict of Rs 80,000 for individual above 80 years, Rs 60,000 for individual above 60 years and Rs 40,000 for relaxation)
Part 80U: Bodily Disabled Tax payer (Rs 75,000 for 40% to 80% incapacity and Rs 1,25,000 for greater than 80%)
Part 80DD: Bodily Disabled Dependent (Rs 75,000 for 40% to 80% incapacity and Rs 1,25,000 for greater than 80%)
Part 80G: Donation to authorized charitable funds like Prime Minister Aid fund, and so forth
Part 80GGA: Donations for scientific analysis or rural growth
Part 80GGC: Donations to political events
Part 80TTA: Curiosity acquired in Financial savings Account
Part 80TTB: Curiosity revenue for Senior Residents. They will use both 80TTA or 80TTB however not each collectively.
Tax Free Wage Parts
There are elements in wage that are totally or partially tax exempt. For instance HRA is tax exempt in the event you fulfill sure situations. You’ll be able to have the whole record within the put up: Will need to have Tax Free elements in Wage.
Part 80GG: In case you don’t obtain HRA from employer or are self-employed however NO home in your title (Declare Tax Profit for Hire Paid u/s 80GG)
We hope this might make it easier to to maximise your revenue tax financial savings for FY 2021-22!
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