Only 12 days are left for tax saving. If you want to do tax saving for this financial year, then you have to do this work by 31st March. However, it is important to keep in mind that the benefit of tax saving is available only in the old regime of income tax. If you are using the old regime, then you can claim tax saving deduction till 31st March.
Tax-Savings under Section 80C
Under Section 80C of the Income Tax Act, 1961, deduction can be claimed by investing in certain investment options. These include ELSS, Sukanya Samriddhi Yojana, PPF, life insurance policies, tax-saving FD schemes of banks. Apart from this, deduction can also be claimed on the tuition fees of two children. It has to be kept in mind that by investing in these investment options, a maximum deduction of Rs 1.5 lakh can be claimed.
Experts say that if you have not made any tax-saving investments till now, you can do this till March 31. But, you have to keep in mind that you do not have to invest just to save tax. The investment should be such that it helps you in achieving your financial goals. For example, by investing in the tax savings scheme of mutual funds i.e. ELSS, you can save tax and also create a big fund in the long term. This fund can be used to meet your children's higher education, marriage or your post-retirement expenses.
Investment options in NPS
If you work in the private sector, you can contribute 10% of your basic salary (plus dearness allowance) to NPS and claim deduction under section 80CCD(1). Its limit will be equal to the limit of Rs 1.5 lakh under section 80C. Apart from this, the employee can claim deduction on contribution of additional Rs 50,000 to NPS under section 80CCD(1B). You can also become a part of Corporate NPS. But, this will happen only if your employer offers you this facility.
Deduction under section 80D
If you have not bought a health policy, you can buy one before March 31. You can claim deduction on its premium. This will reduce your tax liability. Under Section 80D of the Income Tax Act, a person can buy a health policy for himself and his family (wife and two children) and claim deduction on its premium. If you are below 60 years of age, a deduction of Rs 25,000 can be claimed on the premium.
Also read: Income tax : Which of the new and old income tax regimes is more beneficial?
If you are above 60 years of age, you can claim a deduction of Rs 50,000 on the premium. Apart from this, you can also claim deduction on the premium of your parents by purchasing a health policy for them. If the age of the parents is more than 60 years, a deduction of Rs 50,000 can be claimed.
