Income Tax Deduction: It is necessary for salaried employees to file income tax return. Under the new tax system, tax exemption has been given on annual income of Rs 7 lakh. In such a situation, if you have an income of less than seven lakh rupees, then you can opt for the new tax regime. At the same time, tax exemption can be taken by claiming many deductions under the old tax system.
If your income is Rs 10 lakh and you want to save your entire salary, then here are some ways by which you can save your entire income. Let us know what needs to be done to get tax exemption.
Save 5 lakh rupees in this way
- Standard deduction of Rs 50,000 under section 16(ia) of the IT Act
- Deduction up to Rs 1,50,000 under Section 80C of the IT Act, for which you can claim life insurance premium, provident fund, national savings certificate, payment of home loan principal etc.
- Under Section 80CCD (1B) of Income Tax, a deduction of Rs 50,000 can be taken under the NPS scheme.
- For the payment of health insurance premium, Rs 25,000 and Rs 50,000 for senior citizens can be taken under section 80D of the IT Act.
- In respect of interest on home loan up to Rs.2,00,000, deduction is allowed under section 24(b) of the IT Act.
Zero tax on income of Rs 10 lakh
If you apply all these deductions, then your income will now be Rs 5 lakh or Rs 5 lakh, 25 thousand. This means that now you will have to pay tax of Rs 25,000 on the remaining Rs 5 lakh income. You can take exemption of this tax amount under section 87A. That is, now you will not have to pay a single rupee tax on an income of Rs 10 lakh.
Can take advantage under the old tax system
You can avail these benefits under the old tax regime, but if the income is less than 7 lakhs, then you can get exemption up to 7 lakh rupees without claiming any deduction, because during the budget 2023, Finance Minister Nirmala Sitharaman announced the new tax scheme. Under the system, tax exemption has been announced on annual income up to Rs 7 lakh.
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