Finance

Different Ways To Save Income Tax Amount

When an individual has to pay income tax on all of his or her earnings, he or she must also know that there are some deductions also given on various factors. Every tax payee must also know about such deductions so that they can invest in different savings and save more and more income tax amount. Just read all below given steps and know about savings and tax deductions. You can also get an idea about the tax return estimate.

Step 1: Various account for all deductions from the amount of income tax

For instance, your different investments can give you savings of Rs. 150000 on your income tax amount. Such savings are defined under section 80C. Some of the best tax savings are mentioned below:

  • Public Provident Fund (PPF)
  • Investment in NABARD bonds
  • National Savings Certificate (NSC)
  • National Pension System (NPS)
  • Premium paid for ULIPs

Step 2: Take a look at all income tax slab and apply the proper rate of tax on your income

Tax rate slabs for individuals are determined based on their total income and under which income tax slab their income falls. There are three different sets of income tax slab rates which are given by the Income-tax act 1961, depending on the age and income of the individual taxpayer.The income tax calculator is also one of the most used tools to calculate income tax.

Income tax slabs for individuals who come under the age of 60

Income tax slab (in Rs.)         Tax rates applicable

0 to250000                             Nil

250001 to 500000                  5 % of total income exceeding 250000

500001 to 1000000                Rs. 12500 + 20 % of the total annual income above 500000

Above 1000000                      Rs. 112500 + 30 % of the total income exceeding 1000000

Income tax slabs for individuals who come under between the age of 60 to 80

Income tax slab (in Rs.)         Tax rates applicable

up to 300000                          Nil

300001 to 500000                  5 % of total income exceeding 300000

500001 to 1000000                Rs. 10000 + 20 % of the total annual income above 500000

Above 1000000                      Rs. 110000 + 30 % of the total income exceeding 1000000

Income tax slabs for individuals who are above the age of 80

Income tax slab (in Rs.)         Tax rates applicable

up to 500000                          Nil

500001 to 1000000                20 % of total income exceeding 500000

Above 1000000                      Rs. 100000 + 30 % of the total income exceeding 1000000

There is an additional 4% Education Cess&Health which hasto be paid on every front on the amount of income tax and the surcharge is also paid. There is also a need to pay a surcharge which will be applicable as per the income slab of an individual. For getting the exact amount of income tax on your salary, you can also use one of the best online tax calculation tools which is a tax calculator or taxfyle’s tax calculator.

Step 3: Deduct TCS, TDS, TCS, and other advance taxes, if any

If you are already paying TCS, TDS,or other advance taxes, then you should deduct all such taxes from your tax liability to pay at the balance tax payable (or refundable).

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