1) Use up your Section 80C limit of Rs. 1.5 lakh:
To reduce your income tax in India, pick any of the following deductions or investments up to a maximum of 1.5 lakh INR.
Tax-Saver fixed deposits
- PPF (Public Provident Fund)
- NSC (National Saving Certificate)
- ELSS
- Life Insurance Premiums
- National Pension System (NPS)
- Payment of home loan
- Payment of tuition fees
- EPF
- Senior Citizens Savings Scheme
- Sukanya Samriddhi Yojana
2) Make a National Pension System contribution:
According to Section 80CCD(1B) of the Income Tax Act, the maximum contribution you can make to the National Pension System is 50,000 Indian Rupees. Through NPS, you can prepare for retirement by making contributions to equity and debt pension plans. The entire sum, however, can only be withdrawn after turning 60.
3) Costs of Health Insurance:
According to Section 80D, you may deduct up to 25,000 INR, while senior citizens may deduct up to 50,000 INR. Any individual who pays the senior citizens' health insurance premiums may deduct a total of 75,000 Indian rupees per year.
4) Rent payment deduction:
Under section 80GG of the Income-tax Act, you may deduct almost 60,000 INR. If your employer offers House Rent Allowance (HRA), you may deduct it from your pay under specific circumstances.
5) Home loan interest:
You are entitled to a deduction of two lakh Indian rupees (INR) for house loan interest paid under Section 24. There is no upper restriction if you have rented out the home.
6) Funds held in a savings account
You may deduct up to 10,000 INR per year in accordance with section 80TTA of the Income Tax Act. However, the older citizen is eligible for a 50,000 INR discount on both fixed deposits and savings accounts under section 80TTB.
7) Charity Contribution:
Every donation to charity is eligible for a tax deduction, and there is no upper limit. However, there are restrictions and requirements that apply to the amount of the deduction. For many gifts to NGOs, for instance, you can get a 50% tax break.
