What is Tax Savings?
A tax saving is a process for a reduction in the amount of taxes paid by an individual, business, or other taxpayers. This process will result in a reduction of income tax withholding after filing an income tax return.
Income like salaried income, income from a business, and income from investments are taxable. Tax savings often result from credits, deductions, and exemptions. There are sections that can reduce tax liabilities.
- Section 80C allows deductions from total taxable income during a financial year if your investments come under some scheme such as PPF, NPS, Home loan repayment, tuition fees, etc.
- Section 80CCD stipulates deductions for investment in NPS.
- Section D allows a deduction up to Rs. 1 Lack for insurance premium for self, children, and spouse.
- Section 80DD deduction under if you’ve got a dependent who is differently-abled and entirely dependent on you for maintenance.
- Section 80E helps for tax savings on education loan repayment.
- Section 80EE is considered as a deduction on home equity credit repayments for the first-time buyer.
- Section 80G is for deductions made to Income tax department-approved charitable organizations.
- Section 80GG is considered for deductions for HRA received as a part of the salary.
- Section 80TTA is used to say a deduction of Rs. 10,000 on your interest income. Section 80DDB is used to claim tax deductions on medical expenses incurred to treat specific ailments.
- Section 80U allows individuals who are certified to be at least 40% disabled to claim tax benefits.
- Section 80GGC allows individuals to say tax deductions on contributions to political parties registered under Section 29A of the Representation of the People Act.
Also, See: Tax Deducted at Source (TDS) | Tax Collected at Source (TCS)