Income Tax Savings: Today we are going to tell you such a method, with the help of which you will not have to pay even 1 rupee tax on annual salary of Rs 10.5 lakh. Let us tell you the complete calculation.
New Delhi. Income Tax Savings Tips: If your annual salary is more than Rs 10 lakh, then you will have to pay a large part of your earnings to the government in the form of tax. With the increase in income every year, the tension of tax liability also increases. But, if the planning is right then tax can be saved even on higher salary bracket. But today we are going to tell you such a way, with the help of which you will not have to pay even 1 rupee tax on annual salary of Rs 10.5 lakh. Let us tell you the complete calculation.
No tax will have to be paid on salary of Rs 10.5 lakh
The most important thing that has to be kept in mind is- the savings and expenses have to be kept in this way so that you can take advantage of the tax exemption available on it. Suppose your salary is Rs 10,50,000 per annum, and your age is less than 60 years, that means you will fall in 30% slab.
1- First of all deduct Rs 50,0000 as standard deduction.
10,50,0000-50,000 = Rs 10,00,000
2- After this you can save 1.5 lakh rupees under 80C. In this, you can take advantage of income tax exemption on investment in EPF, PPF, ELSS, NSC and up to Rs 1.5 lakh annually in the form of tuition fees for two children.
10,000,000-1,50,000 = Rs.8,50,000
3- If you invest up to Rs 50,000 annually in the National Pension System or NPS on your behalf, then under section 80CCD (1B) of the Income Tax Act, you get help in saving income tax separately.
8,50,000-50,0000 = Rs.8,00,000
4- If you have taken a home loan, then under section 24B of Income Tax, you can claim tax exemption on the interest of 2 lakhs.
8,00,000-2,00,000 = Rs.6,00,000
5- Under section 80D of income tax, you can claim deduction up to Rs 25,000 for health insurance premium including cost of preventive healthcare check-up for spouse, children and yourself. Apart from this, if you buy health insurance for the parents, then you can get an additional deduction of up to Rs 50,000. The condition is that the parents should be senior citizens.
6,00,000-75,000 = Rs.5,25,000
6- Under Section 80G of Income Tax, you can claim tax deduction on the amount given in the form of donation or donation to organizations. Suppose you made a donation of Rs 25,000, then you can take tax exemption on it. However, you will have to submit documents to confirm the donation or donation. A stamped receipt should be received from the institution to which you donate or donate. This will be the proof of donation that has to be submitted at the time of tax deduction.
5,25,000-25,000 = Rs.5,00,000
7- So now you have to pay tax only on income of Rs 5 lakh and your tax liability will be Rs 12,500 (5% of 2.5 lakh). But, since the exemption is Rs 12,500, he will have to pay nil tax in the 5 lakh slab.
Total Tax Deduction = 5,00,000
Net Income = 5,00,000
Tax Liability = Rs 0