If you want, you can save tax even on income above 10 lakhs. There are many such schemes, by investing in which you get tax benefits.
At present, tax concession has been given by the government on income up to Rs 5 lakh. If the income is more than this, it will be considered taxable and your tax liability will be according to the tax slab. But if you want, you can save tax not only on 5 lakhs but also on income above 10 lakhs. There are many such schemes, by investing in which you get tax benefits. Know here how you can save tax on income of more than 10 lakhs.
First, Understand The Tax Slab
The Income Tax Rule says that no tax will have to be paid on annual income up to 2.5 lakhs. There is a provision of a 5% tax on income between 2.5 to 5 lakh rupees. 20% tax has to be paid on income between 5 to 10 lakhs and 30% tax on income above 10 lakhs.
How To Save Tax
- Suppose your income is Rs 10,50,000. First of all, you reduce the standard deduction of Rs 50,000 from this. Standard Deduction is the deduction that is deducted from your income and then tax is calculated on the remaining income. On behalf of the government, salaried employees and pensioners get the benefit of a standard deduction of up to Rs 50,000. After deducting Rs.50,000, your income will come within the range of Rs.10,00,000.
- Apart from this, the government gives a rebate of up to Rs 1.5 lakh under 80C. You can save up to Rs 1.5 lakh by investing in schemes like EPF, PPF, ELSS, and NSC. After deducting Rs 1.5 lakh from Rs 10,00,000, your income will be Rs 8,50,000.
- You can also save up to Rs 25,000 by taking a medical policy for your family. Under section 80D, it gets a tax exemption of up to Rs 25,000. On the other hand, if your parents are senior citizens, then you can claim a deduction of up to Rs 50,000 by purchasing a health insurance plan for them. This way you can save up to Rs 75,000. If you deduct 75,000 from 8,50,000, then your income will be Rs 7, 75,000.
- You invest your money in the property and take a home loan for it. Under Section 24B of Income Tax, you can avail of tax exemption on the interest of Rs 2 lakh on a home loan. In this case, if you reduce Rs.2,00,000 out of Rs.7,75,000, then your income will be Rs.5,75,000.
- You can save up to Rs 50,000 by investing in NPS. Under Section 80CCD (1B) by investing up to Rs 50,000 annually in the National Pension System ie, you get the option of saving Income Tax up to Rs 50 thousand. In this case, if you reduce Rs.50,000 out of Rs.5,75,000, then your income will be Rs.5,25,000.
- If you donate money, you can save up to Rs 25,000 under section 80G of income tax through a stamped receipt for donation or donation. In this way, after deducting Rs.25,000 from Rs.5,25,000, your income comes within the range of Rs.5 lakh.
- Rs 12,500 is taxed on an income of Rs 5,00,000, you get a rebate of Rs 12,500 under section 87A. In such a situation, you can completely avoid the liability of tax.
