How to save taxes in 2023?
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However, it can be confusing when deciding which mediums to take for saving on income taxes. There are ample queries that a taxpayer can face such as,
- how much taxes one can save,
- what is the lock-in period,
- how many tax deductions are available in income tax sections, especially section 80, or
- when is the right time to take action for ensuring to save on your taxes? And the list of questions goes on!
The answer to these queries is the Tax-saving schemes or plans that help taxpayers to save tax when filing their ITRs. It ultimately helps them in reducing their financial stress by reducing their tax burden via investing in any of such financial schemes.
The most popular tax-saving options available are under Section 80C of the Income Tax Act which can help you claim a tax deduction of up to 150,000 Rupees in a financial year.
In case, if a taxpayer wants deductions over and above the limit prescribed in section 80C, then they can invest in the checklists provided below:
– Section 80TTA: Interest earned from saving accounts deposits
– Section 80E: Interest paid toward the repayment of the Education Loan
– Section 80D: Premium paid toward the Health Insurance Policies or incurred medical expenses in case of senior citizens
– Section 24 (b): Interest repaid towards Home Loan.
– Section 10 (10D): Payouts on the maturity of the Life Insurance Plan.
– Section 80EEA: Interest repayments on home loans for first time buyers.
– Section 10(13A): Exemption of House Rent paid (if mentioned in salary break-up)
– Section 80GG: Deduction of House Rent paid (if not mentioned in salary break-up)
– Section 80G: Donations made to Charitable Institutions.
– Section 80GGA: Donations to Scientific Research and Rural Development
– Section 80GGC: Donations to Political Parties or Electoral Trust.
– Section 80DD: Medical expenses for disabled persons.
– Section 80U: Flat deduction for a disabled person on the basis of the severity of the disability.
– Section 80DDB: Medical ailments.
– Section TTB: Interest earned on deposits by Resident Senior Citizens.
Furthermore, Soni added that there are multiple tax filing companies or fintech companies in the market that guide you in saving the maximum taxes. These companies have introduced several tax planning optimizer tools that can help an individual step-by-step plan their investments and savings using recommendations provided by the tool. These tax-saving tools guide you in selecting the most appropriate tax-saving instrument as per your income and risk appetite.
Additionally, he said, these tax filing companies can help you analyse the additional deductions you can avail to obtain tax relief and get a higher in-hand salary.
