For most people, paying the income tax at the end of the financial year is a big challenge. But, there are various ways to get income tax exemption. These are as follows:
• You can save taxes by buying insurance policies.
- Life Insurance Policies not only provide life coverage, but it also helps in saving tax. Under section 80C of Income Tax Act, the premium paid for the insurance policies are liable for a tax deduction.
- Unit Linked Insurance Plan are market linked insurance plans. This plan offers the benefit of both investment and protection to its investors. These investments help your money grow and are also eligible for tax deduction.
- Health Insurance Policies ensure that you can take care of your medical expenses. They also allow you to save tax upto an extent.
• Investments let you reap the benefits of what you invest later.
- Mutual Funds like Equity Linked Saving Schemes (ELSS) can help in getting the tax benefit.
- Tax Saving Fixed Deposits offered by different banks can be used to save tax. You can gain attractive interest on your deposits.
- Post Office Time Deposit is like a Fixed Deposit with no limits on how much one can put in it.
- National Saving Certificates require a minimum investment of Rs.100 and can be availed from the post office. These too are eligible for tax exemption.
- Provident Funds are generated for long-term returns. These are also known as the Pension Fund.
• Loans can also help in saving tax.
- Home Loans taken for constructing or buying a house can help in saving taxes.
- Home Loan taken for reconstruction and renovation is also eligible for tax deduction.
Everyone looks for ways to get income tax exemptions. Donors can receive tax rebates and exemption under Section 80G of the Income Tax Act, 1961. The tax rebate can be claimed while filing the annual Income Tax Return. This not only gratifies the donor, but it also helps in recognising charitable organisations.
All charity organisations ensure that its donors are rewarded in the form of a tax rebate.
All donations do not guarantee a 100% tax rebate. The total amount minus the donated amount becomes your taxable income. All philanthropic organisations are legitimately allowed to offer a 100% tax exemption in Form 16s. Non-resident Indians with an Indian passport can also receive tax emption under section 35 AC or 80 GGA of the Income Tax Act as their contributions are also recognised by the Government of India.
Donating to charities like Save the Children will let you directly contribute towards helping India’s most excluded and marginalised children from the remotest corners. Donate now and at the same time save tax. You can also donate online.