5 ways you can save tax this year

21/01/19

Inspiring Stories

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Paying income tax at the end of the financial year is often a stressful and challenging task for most people. Everybody is also always trying to look for ways in which they could save tax.If you’re wondering how can I save income tax, there are various ways in which you get tax exemption. 5 ways you can save tax this year are as follows:

How Can You Save Tax in India with Insurance Policies?

Buying insurance policies is one of the best ways to save taxes. Insurance policies like ‘Life Insurance Policies’ provide life coverage and help in saving tax under section 80C of Income Tax Act. ‘Unit Linked Insurance Plan’ offer the benefit of both investment and protection to its investors. These are market linked insurance plans and help your money to grow. Medical expenses can be taken care of by ‘Health Insurance Policies’. These also help in saving tax upto an extent.

Top Ways to Save Income Tax in India Through Smart Investments

You can reap benefits of whatever you invest later through investments. You can get the tax benefit by investing in ‘Mutual Funds’ like Equity Linked Saving Schemes (ELSS). ‘Tax Saving Fixed Deposits’ help in saving tax and you can gain an attractive interest on your deposits. With no limits on how much you can put in, ‘Post Office Time Deposit’ and with a minimum investment of Rs.100, ‘National Saving Certificates’ are also good options for investments and are also eligible for tax exemption. These are considered one of the reliable tax saving options for conservative investors. In addition to all the above mentioned investments, ‘Provident Funds’ also known as the ‘Pension Fund’ are generated to give us long-term returns.

How to Reduce Income Tax in India by Taking Loans

You can also save tax through loans. Now the question arises – How can I save income tax through loans? You can save tax by taking home loans for constructing or buying a house. Home loans taken for reconstruction and renovation are also eligible for tax deduction.

You can also save tax through Education Loan under Section 80E of the Income Tax Act.

Read Also: Everything you need to know about donation tax exemption

Ways to Save Tax: Donate to Charity and Get Tax Rebate

Last but now the least, the best way to save tax is to donate to a charity. Even though all donations do not guarantee a 100% tax rebate. Your taxable income becomes the total amount minus the donated amount. Most philanthropic organisations can legit offer a 50% tax exemption on donation in Form 16s.

Everybody looks forward to saving tax. Donating to charities is not only morally satisfying but charitable organisations also offer tax rebates and exemption under Section 80G of the Income Tax Act, 1961. The most important thing is to identify a charitable organisation that is working on the causes you believe in, as such donations are also among the effective tax saving options. Once you have identified an organisation, you can become a donor and become part of making a difference.

Donating to charities like Bal Raksha Bharat, a child rights NGO will let you support India’s most vulnerable and marginalised children from the remotest corners. Donate now and at the same time save tax. You can also donate online.

Gaurav Sharma

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