look news india
ITR Filing 2024: As the income increases, the tax liability also increases. But, if the planning is right, tax can be saved even on higher salary brackets. If your salary is more than Rs 10 lakh per annum, then you will have to pay a huge amount of tax. But, you have a great way to save tax. Even if you fall in the salary bracket of Rs 10.5 lakh per annum, not a single rupee of yours will go as tax. Let us tell you, the date for filing Income Tax Return (ITR) is near. If you do not file the return by July 31, a penalty may be imposed.
There will be no tax on salary of ₹ 10.5 lakh
First of all you have to keep your savings and expenses in such a way so that you can avail tax exemption on it.
Suppose your salary is Rs 10,50,000 and your age is below 40 years, then it means you will fall in 30% slab.
1- First deduct Rs 50,0000 as standard deduction
10,50,0000-50,000= Rs 10,00,000
2- After this, you can save Rs 1.5 lakh under 80C. In this, you can avail income tax exemption on an amount of up to Rs 1.5 lakh annually as investment in EPF, PPF, ELSS, NSC and tuition fees of two children
10,000,000-1,50,000= Rs 8,50,000
3- If you invest up to Rs 50,000 annually in the National Pension System or NPS, then you get help in saving income tax separately under Section 80CCD (1B) of the Income Tax Act.
8,50,000-50,0000= Rs 8,00,000
4- If you have taken a home loan, then you can claim tax exemption on interest of Rs 2 lakh under section 24B of Income Tax.
8,00,000-2,00,000 = Rs 6,00,000
5- Under Section 80D of Income Tax, you can claim a deduction of up to Rs 25,000 on health insurance premium, which includes the cost of preventive health check-ups for spouse, children and yourself. Apart from this, if you buy health insurance for parents, you can get an additional deduction of up to Rs 50,000. The condition is that the parents are senior citizens.
6,00,000-75,000= Rs 5,25,000
6- Under Section 80G of Income Tax, you can claim tax deduction on the amount given as donation or contribution to institutions. Suppose you have donated Rs 25,000, then you can get tax exemption on it. However, you will have to submit documents to prove the donation or contribution. You should get a stamped receipt from the institution to which you donate. This will be the proof of donation which has to be submitted at the time of tax deduction.
5,25,000-25,000= Rs 5,00,000
7- So now you have to pay tax on an income of Rs 5 lakh and your tax liability will be Rs 12,500 (5% of 2.5 lakh). But, since the exemption is Rs 12,500, he will have to pay zero tax in the Rs 5 lakh slab.
Total tax deduction = Rs 5,00,000
Net Income = Rs 5,00,000
Tax Liability = Rs 0