Income Tax Saving Tips for FY 2020-21

Saving tax is consistently at the bleeding edge of each taxpayer's mind. That is the reason people take a gander at legal roads to bring down their tax liability. Saving income tax requires legitimate tax planning. The Financial year 2019-20 is going to end which will be evaluated in the Assessment year 2020-21. This is likewise a decent time where an individual can design about the tax saving schemes. There are a lot of alternatives accessible to taxpayers for deductions and exemptions, as indicated by Indian laws, by which their tax liability can be limited. 

On account of the Income Tax Act provisions, there are manners by which an individual tax-payer can bring down his tax outgo. The provisions accommodate tax deductions and tax exemptions from the taxable income. These deductions and exemptions decrease your tax liability. 

Tax Saving Tips for FY 2020-21

Purchase Health Insurance :- Section 80D of the Income Tax Act permits the premiums paid for a health insurance policy as qualified deductions from your taxable income. Along these lines, don't overlook a health insurance plan. The arrangement would prove to be useful in meeting the financial costs of a medical possibility you and your family faces. Also, premiums paid for self and family are permitted as an allowance from tax up to a limit of Rs.25, 000. On the off chance that you likewise purchase a health plan for your senior citizen guardians, you can guarantee an additional allowance of Rs.50, 000 creation the absolute accessible derivation Rs.75, 000. 

Invest in Equity-Linked Saving Scheme (ELSS)

These are mutual funds that offer numerous advantages notwithstanding tax deductions under section 80C. Investments made into ELSS up to Rs 1.5 lakh in a year can be deducted from your taxable salary under the pertinent section. 

Also, being an equity-based asset, the increases up to Rs 1,00,000 of every a financial year from ELSS mutual funds are excluded from tax. While there are a couple of different instruments also that can be utilized for guaranteeing deductions under section 80C, ELSS has the least lock-in time of 3 years among all. 

Invest in the National Pension Scheme

Notwithstanding Rs.1,50,000 derivation accessible under section 80CCD(1), Rs. 50,000 more can be asserted as allowance under Section 80CCD(1B) in the event that you invest in NPS. Moreover, in case you're a salaried employee and your employer contributes some amount towards NPS, you can guarantee derivation under section 80 CCD(2) for the amount contributed. Nonetheless, this derivation is accessible up to 10% of essential salary + Dearness allowance. 

Significantly, the allowance accessible under section 80CCD(2) is accessible regardless of whether you pick the new tax conspire. 

Guarantee an allowance on your savings account revenue income :- The Prime Minister's Jan Dhan Yojana conspire has made savings accounts famous among the Indian populace. Other than having a banking account, your savings account additionally procures you a premium. This premium acquired, whenever restricted till Rs.10,000 in a financial year, is permitted as a tax derivation under Section 80TTA. In this way, on the off chance that you procured an interest on your saving record, guarantee it as an allowance. 

Invest in your fantasy home :- Having your own home must be your fantasy. Indeed, for home-proprietors, there is a tax-alleviation as well. While the principal repayments of a home loan are deducted under Section 80C, interest paid on the home loan meets all requirements for derivation under Section 24 of the Income Tax Act. Hence, you can guarantee a tax allowance of up to Rs.2 lakhs on your home loan interest installments. 

Fixed Deposits

You can spare tax by investing in tax saver Fixed Deposits which can bring you tax derivation under section 80C of the Indian Income Tax Act, 1961. You can guarantee an allowance of a limit of Rs.1.5 lakh by investing in tax saver fixed deposits. There is a lock-in time of 5 years for such FDs and the premium procured is taxable. The pace of revenue for the most part goes from 5.5% - 7.75%. 

Medical Insurance Premiums

You can profit tax allowance up to Rs 25,000 on medical insurance premiums paid u/s 80D. This tax advantage is permitted to you and your family. For senior citizens, this limit changes to Rs 50,000. Once more, in the event that you are paying health insurance premiums for yourself as well as your family and senior citizen guardians, the most extreme consolidated derivation accessible is Rs 75,000 in a Financial Year. 

Final Words

In this article, we have given you some regular tax saving tips. In the event that you could follow our direction, it would assist you with planning your own taxes better. The Income Tax Law of India is itself an immense one. Further, numerous alterations come each year as another financial plan (Finance Act), fliers, warnings, and case laws. 

Thusly, we might want to caution you that you ought not depend just on our expressed tax saving methodologies. For dealing with your tax compliances in the best way, it is suggested that you counsel any tax consultant like a Lawyer or a practicing Chartered Accountant. 

We want you to enjoy all that life has to offer for your own tax planning.