Income Tax Saving in India means reducing the income tax amount that a person pays while filing his returns. The Income Tax department which is under the government of India has formulated the Income Tax Act which has several provisions for a person to save the tax that is payable.
The rate of Income Tax Returns in India for income up to Rs. 1.5 lakhs is 20% and for amount more than Rs. 1.5 lakhs the rate of tax that is charged is 30%. In order to avoid paying huge amounts of money as tax and also to save money for themselves people go for Tax Saving on Income in India. A person can go for Income Tax Saving in India under the section 88B if he is an Indian resident and also more than 65 years in age. Then he can avail a rebate of up to Rs. 20,000 on the amount of tax that is payable.
In India, Income Tax Saving can be done under the section 88C. According to this section a lady who is an Indian resident below the age of 65 years is allowed a rebate of Rs. 5000 on the tax that is payable. Income Tax Saving in India can also be done on the premium that is paid for medical insurance, on the interest that is paid on the housing loan, on the expenses that occur for medical treatment either for dependent or self, and also on expenditure that occur for a disabled dependent.
The various schemes for Income Tax Saving in India are:
- Public Provident Fund (PPF)
- National Savings Certificates (NSC)
- Post Office Scheme (POS)
- Kisan Vikas Patra (KVP)
- Dividend
Public Provident Fund is a kind of scheme for Income Tax Saving in India. The minimum that a person can invest in this scheme is Rs. 500 and the limit is Rs. 70,000. The rate of interest in 8% and a person can open this fund any time during the year. National Savings Certificates is another scheme for Tax Saving on Income in India. The rate of interest that a person gets by investing in this scheme is 8% and the minimum limit of investment in this scheme is Rs. 100. Under the Income Tax Act, 1961 section 88, a person investing in this scheme can take income tax benefit on the amount that he has invested.
Post Office Scheme is one of the best schemes in India for Income Tax Saving. The scheme can be operated either jointly or by a single person. The scheme is available all the year round. In the scheme Kisan Vikas Patra for Income Tax Saving in India, the money that is invested gets doubled in 8 years. The minimum amount that a person can invest is Rs. 100 and there is no upper limit. According to the 1961 Income Tax Act, a person is able to do Income Tax Saving in India if he has an income from dividends that come by investing in unit of UTI, shares, and mutual funds.
Income Tax Savings in India are important because through these savings, people are able to save their money by paying less tax. In order to help people to go for Tax Saving on Income in India, the Indian government has made several provisions.
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