Is it a best discount on income tax How can you get it Must know 2023
Generally, private and public sector investments can avail many tax benefits. Not only this, there are many other types of tax benefits. However, how much tax relief will many people get? How can we maximize our savings? In this post, we are going to see how you can get tax relief.
Two types of taxes :
Generally income tax filers get tax relief under Section 80C. Although this is something most people know, there is still a lot we need to know. Taxes are generally of two types namely direct tax and indirect tax.
What are the tax :
Direct tax means that people in India have to pay tax in India regardless of where they get income from any part of the world, if they are not resident in India, then it is enough to pay tax only on the major income from India. Apart from this, income tax concessions are given to senior citizens, senior citizens and super senior citizens.
Old tax system :
Currently there are two types of taxes in India. One is the old income tax system and there is the new income tax system. In the old income tax system, 5% tax is levied on 2.5 – 5 lakh rupees, 20% tax on 5 – 10 lakh rupees and 30% tax on income above 10 lakh rupees.
New tax system :
In the new income tax system, 5% tax on Rs 2.5 – 5 lakhs, 10% tax on Rs 5 – 7.5 lakhs, 15% tax on Rs 7.5 – 10 lakhs, 20% tax on Rs 10 – 12.5 lakhs, 25% tax on Rs 12.5 – 15 lakhs, etc. 15 lakhs and 30% tax is levied. There is no tax on Rs 2.5 lakh in both these tax systems.
Capital Gains Tax :
The above taxation systems mean that capital gains taxes are not levied. There are two types of long term capital gains tax and short term capital gains tax depending on the period of your investment.
Why 80c tax :
Many income tax filers may know this. Section 80C of the Income Tax Act lists the expenses and investments that an individual paying income tax can claim as tax deduction on his income. Section 80C allows an individual to get tax exemption up to Rs 1.5 lakh in a year. However, a taxpayer can make planned expenditure and claim exemption under Section 80C.
What can be availed under 80C :
Category if invested in Life Insurance, General Provident Fund, Employee Provident Fund, Equity Linked Savings Schemes, Sukanya Samriti Yojana, National Savings Certificate, Senior Citizen Savings Scheme, ULIP Insurance Scheme, 5 Year Tax Savings Deposit Fund, NABARD Bank Rural Bonds etc. A tax deduction can be claimed under Section 80C. Apart from this, home loan principal amount, stamp duty, registration fees paid on purchase of house can also get tax relief under Section 80C.
Is interest tax deductible :
Home loan borrowers can claim tax deduction on interest repayments under Section 24B of the Income Tax Act. In this, tax exemption can be claimed up to Rs 2 lakh. However, the house must be constructed within 5 years from the financial year in which you got the loan. Otherwise, only Rs 30,000 can be deducted.
Tax break for retirement savings :
The government is announcing some incentives to increase savings in general, especially for retirement. You can claim exemption under section 80CCC for investments in certain pension funds. You must be an individual to avail benefits under this section. Non-Resident Individuals (NRI) can also avail the above benefits.
Tax concession for education :
loan In today’s age, education is a big dream for many people. Education loan helps many to realize this dream. You can also get tax benefits for this loan. It can avail tax benefit under Section 80E. However, tax exemption for education loan can be availed only for 8 years. You cannot claim deductions beyond 8 years.
Tax relief on insurance :
Generally, many individuals take up health insurance plans not only for financial security but also to benefit from tax deductions. This is tax exempt under Section 80D of the Income Tax Act. However, under the scheme, premiums paid for individual, spouse, children, including health check-up will be exempted up to INR 25,000 for those under 60 years of age. The same people above 60 years of age can claim tax exemption up to Rs 50,000. Also, one can avail tax deduction on parents’ health insurance premiums.
Disability benefits :
An individual whose spouse, children, parents, siblings meet the medical expenses of a differently abled person can claim exemption under Section 80DD. 75,000 rupees as deduction if any expenses are also incurred by the taxpayer’s dependents. If the dependent suffers from 80% or more disability, a deduction of Rs.1,25,000 is available.