Income tax savings are a common goal for individuals and businesses alike. We all want to minimize our tax liability, thus nobody wants to lose out on opportunities to do so. Individuals have varying preferences when it comes to this. Consequently, people may fail to take advantage of more efficient means of reducing their tax liability since they remain with what they already know. This post is intended for taxpayers who want to learn more strategies for minimizing their tax obligations or want tax relief. Consider the following advice if you’re an entrepreneur or salaried worker in India and are interested in reducing your taxable income.
The Tax Advantages of a Home Loan:
First, the tax benefits of getting a mortgage loan:
When you use section 80C to organize your house loan, you may reduce your taxable income. There is an Rs. 1.5 million caps on principle payments under Section 80C, and a Rs. 2 million cap on interest payments under Section 24.
Choices for Deferring Income Taxes under Code Sections 80C, 80CCC, 80CCD, 80D, 80DD, 80DDB, 80CCG, and 80G
Second, savings account interest is free from taxes up to Rs. 10,000 per year. All of your bank savings accounts add up to this total. In the case of seniors, this cap rises to Rs. 50,000.
Thirdly, Non-Resident Indians (NRIs) may benefit financially from the interest accruing on their NRE accounts in India. Interest is accrued on both the principal and the deposit amount. In keeping with the Indian government’s tradition of benevolence toward non-resident Indians, such a sum is not subject to taxation. Earnings from interest are not subject to tax.
A life insurance policy’s payout might come in the form of a lump sum at the policy’s maturity or as a lump sum payment in the event of a claim. If the premium is less than twenty percent of the total covered, the full payment is not taxable. All policies issued before April 1, 2012, are affected. The figure falls to 15% for plans issued on or after April 1, 2012.
Section 10 of the Internal Revenue Code exempts the whole amount of a scholarship awarded to a student (16). Whether the scholarship is public or private, the whole sum will be exempt from taxes in this case.
The long-term capital gain on the sale of shares or equity mutual funds is subject to a 10% tax if the gain is higher than Rs. 1 lakh.
Amounts received as dividends from stocks or equity mutual funds are not subject to taxation.
A wedding is a joyous moment for the whole family, but particularly the newlywed couple. A wedding in India is a massive celebration during which the bride and groom receive several presents. Such donations are exempt from taxation under Section 56(2). Any money, check, or another present given to a married couple is exempt from taxation. Such presents may come from family and close friends.