Taking care of each aspect of your income with respect can make income tax planning less of a burdensome task. Despite the standard methods, there are many more ways to save your taxes than you realize.
If you are concerned about claiming the highest possible refund when filing your taxes, you should check all the tax-saving possibilities available. There are various tax-saving investment schemes such as National Pension Scheme, Donation, and senior citizen fixed deposit schemes with the best senior citizen fixed deposit interest rates.
The top 5 most unusual tax-saving methods you can use to achieve your goals are listed below.
Tuition fees deductions
A parent can claim a deduction when they pay tuition fees to a university, college, school, or any other educational establishment. Whenever you pay tuition fees for your children. You can claim a deduction for the money you spent on them and It is important to remember that this deduction only applies to a maximum of two children.
You can claim a maximum deduction of Rs 1.5 lakh from your tax return for tuition fees paid when you combine deductions from insurance, provident fund, pension, and other investment. These deductions are available under section 80C of the Income Tax Act.
Donate to a social cause
You can donate to specified charities or organizations, whether social or religious, as part of your social duties under section 80G of the IT Act. Avail of a tax exemption of fifty to one hundred per cent for the amount you donate and to such charities if you donate to one of them.
You can also invest money on their behalf in a senior citizen fixed deposit scheme. Many banks and NBFCs offer the best senior citizen fixed deposit interest rates. But before investing your hard-earned money, comparing senior citizen fixed deposit interest rates from various banks is advised.
Several financial institutions,
Such as the National Defence Fund, the PM CARES Fund, the PM National Relief Fund, and other funds set up expressly for a declared national disaster, can assist you in getting a 100% tax exemption. On the income tax department’s website, you can find a complete list of charities under the “Exempted Institutions” section.
Donate to political parties
When individuals make donations to certain political parties approved by the Election Commission of India, the Income Tax Department allows an individual to claim a tax deduction of up to 100%. There are two types of donations:
direct donations to political parties and indirect donations made to registered electoral trusts. You can claim a maximum deduction of Rs 1.5 lakh from your tax return for tuition fees paid when you combine deductions from insurance, provident fund, pension, and other investment. These deductions are available under section 80C of the Income Tax Act.
When the payment is made by cheque, net banking, or UPI ,and the deductions are provided under section 80GGC. If a donation is made in cash or kind, it will not qualify for a tax deduction. As a tax deduction on your taxable income, you can claim the total amount you have donated to a political party as a deduction.
Make investments through your parents
Senior citizens are entitled to unique tax benefits under the Income Tax Act. You can transfer surplus money to your parents through a gift deed or invest on their behalf if you have surplus money. The basic tax exemption limit for senior citizens is 3 lakh, and for super senior citizens, it is 5 lakh.
You can claim a maximum deduction of Rs 1.5 lakh from your tax return for tuition fees paid when you combine deductions from insurance, provident fund, pension, and other investment. These deductions are available under section 80C of the Income Tax Act.
As a senior and super senior citizen, you are exempt from tax if you earn interest income on the investment made in banks and post offices up to 50,000. You can also invest money on their behalf in a senior citizen fixed deposit scheme. Many banks and NBFCs offer the best senior citizen fixed deposit interest rates. But before investing your hard-earned money, comparing senior citizen fixed deposit interest rates from various banks is advised.
Health Insurance Tax Savings
In today’s world, having health insurance is no longer a choice but a requirement. A medical emergency might harm your financial health if you do not have health insurance coverage to cover the cost of the emergency.
Therefore, several tax advantages are included in health insurance policies to encourage more people to purchase health insurance. You are eligible to claim a tax deduction under Section 80D for the amount of the premium that you have paid for your health cover.
In addition, it is possible to claim the benefits, which include the standard health insurance policy, health insurance riders, and additional health cover. You may also deduct the cost of preventative health checkups from your taxable income, but only to the extent that your health insurance covers it.
Also Read- Union Budget 2022: 3-year Fixed Deposit may come under Tax Exemption limit
