Save Tax Upto 78,000
February 20202 min read
As we are approaching the end of this financial year, investors are rushing to find different ways to save tax. A solid financial plan can be created using different tax deductions.
Here’s How You Can Save Tax Up To 78,000
Under Section 80C
Using Section 80C, you can claim tax deduction up to 1,50,000 in a financial year. In simple words, you can reduce your taxable income by 1,50,000 if you use section 80C.
Now under this section, there are multiple options available. Below is a summary of these:
Under Section 80D
This one goes beyond the benefit of tax saving. Much-Needed Health insurance for everyone’s financial portfolio also gives tax deduction as follows:
The most asked question related to health insurance is: ” If I have a mediclaim from my employer, do I really need a separate insurance policy?”
Answer to this is unconditional YES. The most important reason for this is even if you have a medical cover from your employer and it will cease to exist once you leave the job. The requirement for medical cover is mostly after the age of 40. So, ideally, if you take a medical cover at a young age you create a long history of no claims. No Claim history can help with easy settlement of future claims.
Under Section 80CCD (1B)
Over and above 1.50 Lakhs of section 80C, you can also claim deduction up to 50,000 under section 80CCD(1B). And the investment eligible for this is NPS (National Pension Scheme).
NPS is a retirement product that invests in three main categories: Equity, Corporate Bond and Government Bond. NPS also has an embedded lock-in period until the age of retirement. Out of accumulated corpus, 60% can be taken out as lumpsum post-retirement; and 40% will go in an annuity plan to generate regular income.
Now, How Does All This Translate to a Tax Saving of 78,000
If you fall in the highest tax bracket of 30%, and if you use all of the above tax deductions, you can save the tax outgo up to 78,000 including cess. However, no matter which tax bracket is applicable to you, you will get all these deductions and proportionate to the tax rate applied to you.
But as we mentioned earlier, all of the above-mentioned sections should be used beyond tax saving. These three tax-saving deductions are the foundation of your financial plan.
So go ahead and take all the deductions to secure your future!
Our Users also prefer Reading
Mutual Fund Sahi Hai When You Invest in a Right Wa..
The Mutual Fund Industry In India started in 1963, with the inception of ...READ MORE
Important Update : Change in Cut Off Timing for Mu..
Mutual Fund Regulator Sebi has revised the mutual fund cut off time tempo...READ MORE
Why you should create an emergency fund before sta..
The Covid – 19 outbreak has shaken the world to its core. But the i...READ MORE