Best Ways to Save Tax Legally

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Best Ways to Save Tax Legally
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• It is difficult for a common man to survive in
  todays world. The constant inflation has already
  made his life miserable and above that, the
  tension of paying high taxes, at the end of the
  financial year has taken a further toll on his
  health.
• You might not able to shun completely the
  financial problems, but you can certainly reduce
  the extent of your expenses, at least, in case of
  tax payment, if you put your mind into it. So,
  why not explore some legal ways, which can help
  you to save your taxes?

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• Tax Saving
• Tax Saving under Sec 80 C, Sec 80 CCC Sec 80
  CCD If you want to save tax, then you need to
  start planning your investment. In order to
  encourage people to save and invest money in a
  resourceful way government of India allows a
  deduction for tax payment if a person invests in
  any of the instruments listed under Sec 80 C, Sec
  80 CCC Sec 80 CCD.
• Some of these popular investment instruments are
  as follows-
• Pension Plans
• Life Insurance Policy
• Public Provident Fund
• National Savings Certificate
• Fixed Deposit for 5 years (Maximum Investment up
  to Rs. 1.5 lac)
• Employees Provident Fund
• National Pension Scheme

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• The maximum deduction allowed under all three
  sections combined is Rs.1.5 lac. However, if a
  person invests in National Pension Scheme, he
  gets an additional deduction of Rs.50, 000, under
  Sec 80 CCD.
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• Investment on Health Insurance There is another
  awesome option that ensures not only your health
  but also saves you tax. Yes, we are talking about
  Health Insurance premium of the insured, his
  spouse or kids. Under, Sec 80 D, an individual
  can save up to Rs.20, 000, whereas, a senior
  citizen who invested in Health Insurance will be
  provided a deduction of Rs. 25,000 to Rs.30, 000.
• Buy a Home, Save Tax Taking up loan to buy home
  for saving tax is a smart decision. Since, tax
  deduction in case of home loan is claimed under
  three different sections, thus the taxpayer can
  enjoy huge tax relief.
• The Repayment of Home Loan divided into two
  parts-

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• Investment in The Name of Your Child- If
  investment is made in the name of your child or
  maximum two children, you will get the small
  deduction of Rs.1, 500 per child. You can go for
  fixed deposit of 1 year and the 10 return that
  you will be exempted from tax.
• Life Insurance Policy Saves Tax-If any individual
  has bought Life Insurance Policy for himself, his
  spouse, his children or any student that he is a
  guardian of, then he is excused from paying tax
  in case of repayment of interest of education
  loans under Sec 80 E. However, the deduction is
  allowed only for interest amount, not principle
  amount.

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• Conclusion If you do not declare your planned
  tax saving, investment and expenses of the year,
  the expected taxes will be higher. Consequently,
  the employer would start deducting TDS every
  month for the first quarter of the financial
  year. It might happen that when you declare all
  of your tax savings measures, it might be very
  late. Therefore, it is better to start saving tax
  through regular investment from the beginning of
  the financial year.

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