How can a salaried person save tax?

Asked by: Dr. Ron Ritchie DDS  |  Last update: February 9, 2022
Score: 5/5 (57 votes)

Interest income from municipal bonds is generally not subject to federal tax.
  1. Invest in Municipal Bonds. ...
  2. Shoot for Long-Term Capital Gains. ...
  3. Start a Business. ...
  4. Max out Retirement Accounts and Employee Benefits. ...
  5. Use a Health Savings Account (HSA) ...
  6. Claim Tax Credits.

How can a salaried person save income tax?

10 Tax Saving Options for Salaried Employees
  1. Employee Provident Fund. Employee Provident Fund is one of the most popular ways of tax saving for salaried people. ...
  2. Public Provident Fund. ...
  3. Equity Linked Savings Scheme. ...
  4. Life Insurance. ...
  5. ULIPs. ...
  6. Rental Accommodation. ...
  7. National Pension Scheme. ...
  8. Health Insurance.

How much tax can I save on my salary?

Section 80C is a popular tax-saving deduction where you can save up to a maximum of Rs 1.5 lakh per financial year, using certain investments and expenses. The tax saving calculator consists of a formula box, where you enter the total taxable income, and your current investments or expenses under Section 80C.

How can I save tax on 7 lakhs?

If you earn an annual salary up to Rs. 7.75 lakh, here's how you can pay zero tax
  1. Highlights.
  2. People earning up to Rs. 5 lakh are now exempt from paying tax.
  3. Salaried individuals earning up to Rs. 7.75 lakh can also pay zero tax.
  4. To reduce taxable income to Rs. 5 lakh, invest fully in Sections 80C, 80D, 80CCD(1B), 80TTA.

How can I save tax if I earn 15 lakh?

1. Reduce Your Taxable Income by Up To Rs 1.5 Lakhs (Section 80C, 80CCC, 80CCD)
  1. Unit Linked Insurance Plans (ULIPs)
  2. Pension or Annuity Plans from Life Insurance Companies.
  3. Public Provident Fund (PPF) & Employee Provident Fund (EPF)
  4. New Pension Scheme Tier-I Account.
  5. Senior Citizen Savings Scheme.

Best Tax Saving Guide | Complete tax planning for salaried persons | FY 2021-22

32 related questions found

How can I save tax on my salary over 50 lakhs?

Tax exemptions can be availed by investing in the following tools:
  1. Senior Citizen Savings Scheme (SCSS)
  2. Sukanya Samriddhi Yojana (SSY)
  3. National Pension Scheme (NPS)
  4. Public Provident Fund (PPF)
  5. National Pension Scheme (NPS)

How can I save tax if I earn 20 lakh?

Donations - Section 80G of the Income Tax Act also allows you to avail tax saving on 20L income for making donations to charities, NGOs and government-backed relief funds. The amounts donated to such organizations are entirely exempted from tax. Others - Section 80TTA allows you to avail deduction up to Rs.

How can I save tax on 12 lakhs?

  1. 1) Standard Deduction of Rs. ...
  2. 2) Profession Tax of Rs. ...
  3. 3) Investment in 80C for taking full benefit of 1,50,000: ...
  4. 4) Investment in National Pension Scheme up to Rs. ...
  5. 5) Deduction of NPS contribution by employer under section 80CCD(2) up to Rs. ...
  6. 6) Home Loan Interest and House Rent Allowance Rs.

How do rich save taxes in India?

Here's a list of popular investment options to save tax under section 80C.
  1. Public Provident Fund.
  2. National Pension Scheme.
  3. Premium Paid for Life Insurance policy.
  4. National Savings Certificate.
  5. Equity Linked Savings Scheme.
  6. Home loan's principal amount.
  7. Fixed deposit for a duration of five years.
  8. Sukanya Samariddhi account.

How can we save tax for salary above 15 lakhs Quora?

Invest 1.5 L for 80C rebate, another 50,000 over and above this in NPS - these are the standard tax saving options. Opt for NPS through employer, the employer contributions will become the tax free component of your CTC.

How can I save tax on salary 2021 22?

The maximum tax deduction limit for senior citizens is Rs. 50,000.
...
  1. Section 80D: Medical Insurance Premium.
  2. Section 80G: Charitable Donations.
  3. Section 80GG: Rent towards Accommodation.
  4. Section 80D: Health Insurance.
  5. Section 80E: Education Loans.
  6. Section 80EE: Home Loans.
  7. Section 80TTA: Interest on Saving Accounts.
  8. HUF Receipts.

How do I reduce my tax to zero?

Tax Exempted Salary Components
  1. Meal Coupons.
  2. Car Maintenance.
  3. EPF (Contribution by Employer)
  4. NPS (Contribution by Employer)
  5. Gift voucher.
  6. Mobile Phone and the Internet Bill Reimbursement.
  7. Newspaper/Journal Allowance.
  8. Children Education/Hostel Allowance.

How can I get zero income tax?

Invest up to Rs 50,000 annually in the National Pension System (NPS) scheme to get a rebate under section 80CCD (1B) of the Income Tax Act. 4. If you have a home loan to repay and your annual interest is over Rs 2 lakhs, then you can save up to a maximum of Rs 2 lakh under section 24B of income tax. 5.

How can I avoid 10 lakhs tax?

First, there is a standard deduction of Rs 50,000 for salaried individuals. This will reduce the taxable income to Rs 9.7 lakh. Then come the tax-saving investments under Sec 80C, which can reduce taxable income by up to Rs 1.5 lakh. Another Rs 50,000 can be reduced by investing in the NPS under Sec 80CCD(1b).

How can I invest to save tax?

The following investment instruments get tax deduction under Section 80C of the Income Tax Act, 1961:
  1. NSC.
  2. PPF.
  3. SCSS.
  4. Life Insurance.
  5. ELSS Mutual Funds.
  6. Pension Fund.
  7. 5 years Bank Fixed Deposits.
  8. 5 years Post Office Deposits.

What income is tax free?

Individuals with Net taxable income less than or equal to Rs 5 lakh will be eligible for tax rebate u/s 87A i.e tax liability will be nil of such individual in both – New and old/existing tax regimes. Basic exemption limit for NRIs is of Rs 2.5 Lakh irrespective of age.

How can I reduce my taxable income 2021?

Ten tips to lower your federal income tax bill before 2021 ends
  1. Defer bonuses. ...
  2. Accelerate deductions and defer income. ...
  3. Donate to charity. ...
  4. Maximize your retirement. ...
  5. Spend your FSA. ...
  6. Buy high, sell low. ...
  7. Make adjustments in W-4 withholding. ...
  8. Be aware of the 'other dependent credit'

How save tax if salary is 20 lakhs Quora?

How to save income tax when a salary is more than 20 lakhs per annum - Quora. Apart from the standard rebate of Rs 1.5 Lakhs U/S 80 C, you can look at contributing Rs 50,000 to NPS on your own every year, this contribution to NPS is eligible for an extra rebate upto RS 50,000 every year over and above 80C rebate.

What is limit of income tax in India?

5,00,001 - ₹ 7,50,000. ₹12500 + 10% of total income exceeding ₹5,00,000. ₹12500 + 20% of total income exceeding ₹5,00,000. ₹7,50,001 - ₹ 10,00,000. ₹37500 + 15% of total income exceeding ₹7,50,000.

How can we save tax for salary above 25 lakhs Quora?

Some of such investments are given below which are eligible for an exemption under Section 80C up to a maximum of Rs 1.5 lakh.
  1. Life insurance premium.
  2. Equity Linked Savings Scheme (ELSS)
  3. Employee Provident Fund (EPF)
  4. Annuity/ Pension Schemes.
  5. Principal payment on home loans.
  6. Tuition fees for children.