How To Save Tax In Financial Year 2022
If you will talk to your colleagues regarding ways to save tax they will let you know ways that they use. If you are not looking for opportunities to save taxes, you are missing out on the race. There are more or less productive ways in which you have can save your hard-earned money. Below reading, points will make you aware of smart tax-saving ways.
Take Benefit Of HRA
If you are living in a rented apartment you can take this benefit. Just make sure that your rent agreement is updated and you have all receipts. This comes under section 10(13).
If you are not getting HRA benefits from your employer and you are living on rent, you can claim the deduction for the rent amount under section 80(GG).
Leave Travel Allowance
You can use transaction receipts of travel that has been done by your spouse, children, and parents. If your sibling is dependent on you then you can use their travel receipts as well. This comes under section 10(5).
Gratuity Fund Amount
You should know that the money you receive as a gratuity fund is tax-free. But there is a limit of Rs 20 Lakh on it and above Rs 20 Lakh you will have to pay tax.
Save Tax On Food Coupons
Food coupons that your HR gives you every month can be used to save tax. The annual limit for food coupons to be non-taxable is Rs 26,400.
Company Leased Car
If lease rental of a car is part of your package then you can take this benefit. The lease amount is non-taxable so next time look for this benefit.
Telephone And Internet Expense
You just have to submit your telephone or broadband bill and you can get tax benefits on it.
Save Tax On Voluntary Retirement Scheme Amount
A lot of people opt for Voluntary Retirement Scheme and take a sum of the amount. That amount is not taxable up to the limit of Rs 5 lakhs.
Public Provident Fund
Public Provident Fund Statement under section 80C can help you take tax benefits. The tax benefit is provided against gross total income.
National Pension Scheme
NPS Statement under sections 80C and 80CCD (2) can save you tax against gross total income.
Save Tax Tuition Fee Of Children
Under section 80C you can save tax on tuition fees paid by you for your children. You need to keep receipts for availing benefits.
How to plan your tax-saving investments for the year
The best time to start planning your tax-saving investments is at the beginning of the financial year.
Most taxpayers procrastinate till the last quarter of the year, resulting in hurried decisions. Instead, if you plan at the start of the year, your investments can compound and help you achieve long-term goals. Remember, tax-saving should be an additional perk and not a goal in itself.
Use the following pointers to plan your tax-saving for the year:
- Check the tax-saving expenses you already have – like insurance premiums, children’s tuition fees, EPF contribution, home loan repayment, etc.
- Deduct this amount from Rs 1.5 lakh to figure out how much to invest. You needn’t invest the entire amount if expenses are covering the limit.
- Choose tax-saving investments based on your goals and risk profile. ELSS funds, PPF, NPS, and fixed deposits are some of the popular options.
This way, you can figure out how to exhaust the 80C limit. It is best to begin investing in the first quarter of the financial year so that you can spread the investments over the year. Doing this won’t burden you at the end of the year and will also allow you to make informed investment decisions.