Taxes are unavoidable but you can surely minimize its impact by filing the income tax return every year whether you have invested your money or made large payments against loan travel or insurance it’s time to look back at the year to maximise your deductions and thereby lower your tax burden in auditor in India.
There are many heads under payments and investments against which you can claim your deductions, but here are the top 5 that you shouldn’t miss out:
- Contribution made towards Public Provident Fund (PPF)
Investments in these small saving instruments start from as low as Rs 500 up to Rs 1.5 lakh with a rate of interest at 8 per cent per annum.
While the lock-in period is 15 years, withdrawal is possible under certain conditions.
The investment, the gains as well as the withdrawals are completely tax-free.
- Employer’s Provident Fund (EPF)
The employer’s contribution to your EPF is tax-free, and your contribution is tax-deductible under Section 80C of the Income Tax Act.
The total PF amount deducted annually can be claimed by you as deduction while computing your total taxable income.
So the money you invest in your EPF, the interest earned and the lump sum withdrawal after the specified period are exempt from income tax.
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