This year the tax filing deadline for salaried individuals is 31st July 2023.
But if all your calculations and documents are ready then file your income tax return without waiting for the last date or extension.
Along with filing returns of last year, you should also start tax planning for the current financial year. I will share some tips to save income tax that’s not commonly known to everyone.
You can save your income tax without hiring a CA. It’s better if you understand your income tax obligations and plan ahead for the tax-saving investments.
First, you need to make a choice between the new tax regime or want to carry on with the old tax slabs.
New Tax Regime vs. Old Tax Regime
Individuals and HUFs have an option to move to the new tax regime.
But you need to intimate your employer about your choice at the beginning of the financial year.
The income tax slabs are as follows:
| Income slabs (Rs) | Tax Rate (Old Regime) | Tax Rate (New Regime – devoid of exemptions & deductions) |
| Up to 2.5 lakh | Nil | Nil |
| 2.5 – 5 lakh | 5% | 5% |
| 5 – 7.5 lakh | 20% | 10% |
| 7.5 – 10 lakh | 20% | 15% |
| 10 – 12.5 lakh | 30% | 20% |
| 12.5 – 15 lakh | 30% | 25% |
| Above 15 lakh | 30% | 30% |
The tax rates are lower in the new regime, but you will not be able to avail a total of 70 exemptions and deductions available under various sections of the IT Act, such as –
Standard deduction of 50,000 only applicable to salaried persons, Leave Travel Allowance (LTA), House Rent Allowance (HRA), Entertainment allowance. And deductions under Section 80 (such as 80C, 80CCC, 80CCD, 80D, 80DD, 80E, 80EE, 80G, 80GG, 80GGA, 80GGC).
Let’s calculate & compare your tax liability under both the old tax regime & new tax regime.
For example, you are earning Rs. 10 lakhs in total income, with total investments under 80C like contribution to EPF and others, is Rs. 1,50,000 and living on rent with HRA benefit of Rs. 50,000 then –
| Particulars | Old Tax Regime | New Tax Regime |
| Total Income | 10,00,000 | 10,00,000 |
| Standard deduction | -50,000 | 0 |
| 80C deductions/exemptions | -1,50,000 | 0 |
| HRA | -50,000 | 0 |
| Net taxable income | 7,50,000 | 10,00,000 |
| Tax slabs | Old Tax Rate | Tax (Old) | New Rates | Tax (new) |
| 0 – 2.5 Lakhs | 0% | 0 | 0% | 0 |
| 2.5 – 5.0 Lakhs | 5% | 12,500 | 5% | 12,500 |
| 5.0 – 7.5 Lakhs | 20% on 2.5L | 50,000 | 10% on 2.5L | 25,000 |
| 7.5 – 10 Lakhs | 20% | 0 | 15% on 2.5L | 37,500 |
| Total taxes | Rs. 62,500 | Rs. 75,000 |
Under the above situation, you are better off with the old tax regime.
In case, you have a home loan for which you are paying Rs. 2 lakhs of interest then –
- Under the new tax regime, you have to forego Rs. 2 lakh of deduction
- Whereas, under the old tax regime you can take it as a deduction.
In such a scenario, tax filing for annual income Rs. 10,00,000 + Rs. 2,00,000 = 12,00,000 would be ideal under the old tax regime.
In a nutshell –
- Old tax regime is ideal for salaried employees who are willing to take the deduction for tax savings
- Whereas new tax regime is for those who are either not eligible for deductions or don’t want to invest under tax saving schemes
| Income | Taking Deduction/Investment | Regime to Choose |
| More than 15 lakh | Taking deduction min 2.5 L | Old tax regime |
| More than 15 lakh | No | New tax regime |
| Less than 15 lakh | Yes (full limit) | Old tax regime |
| Less than 15 lakh | Yes (a small amount) | Do your calculations |
| Less than 15 lakh | No | New tax regime |
Point to Note – You can change the tax filing option every year, so your choice will not be permanent.
Do your calculations and choose the option accordingly every year.
35 Easy Ways to Save Income Tax in India 2023
#1. Interest Income on Saving Account
(Tax Saving Under Section: 80TTA/80TTB)
Max Tax Saving Limit – Rs. 10,000 under TTA and Rs. 50,000 under TTB.
Section TTB is applicable for senior citizens and TTA for other individuals less than 60 years of age.
If you are less than 60 years of age then, the interest earned on savings accounts is not taxable up to Rs. 10,000 under section 80TTA.
For example, in the last financial year, you earned Rs. 15,000 as interest from all your savings accounts (you need to add up interest received on all your bank saving accounts), then you need to pay tax only on Rs. 5,000.
The exemption is higher (Rs. 50,000) in case of senior citizens (80TTB). The exemption amount also includes interest earned from fixed & recurring deposits too.
Here you also need to consider interest earned on the savings accounts of a post office and co-operative society(engaged in the business of banking) too for claiming the exemption.
Comparison table –
| Particulars | Section 80TTA | Section 80TTB |
| Applicable to | Individuals less than 60 years of age | Senior citizens |
| Interest Income | Interest earned from savings account only | Interest earned from savings, fixed and recurring deposits. |
| Exemption amount | Rs. 10,000 | Rs, 50,000 |
#2. Interest Income on NRE Account
Indian Government provides tax incentives to attract investments from NRIs. Individuals with deposits in an NRE account don’t have to pay tax on interest income earned on these deposits.
Some Indians residing abroad borrow loans from their resident foreign country at 3-4% and invest it in India through an NRE account and earn tax-free income on deposits at 5 – 6.75%.
There is an exception to this provision – If the individual has lived in India for more than 182 days during the financial year, his interest income from NRE deposits will become taxable.
#3. Maturity or Claim Amount Received on Life Insurance
Income Tax Saving U/S: 10(10D)
If you hold a life insurance policy issued prior to 1 April 2012 then
Any proceeds received on account of maturity or amount received as bonus of an insurance policy is exempt from tax only if the premium paid does not exceed 20% of the sum assured.
For example, if the annual premium is Rs 10,000, to qualify for the exemption, the minimum sum assured under the policy is required to be Rs 50,000.
If the sum assured is less than the said value, the entire maturity proceeds would be taxable.
For policies issued after 1 April 2012
The premium paid in respect of such policies should not exceed 10% of the sum assured.
In case you bought the policy after 1 April 2013 and the policy covers disability (as referred u/s 80U) or specified disease (as per section 80DDB), then in order to claim the deduction, the premium should not exceed 15% of the sum assured.
#4. Educational Scholarship
Save Income Tax Under IT Section: 10(16)
Max exemption: No upper limit, full scholarship amount is tax-free
Any amount received as a scholarship for education is not taxable. It does not matter if the scholarship is granted by the government or from a private trust.
#5. Profit From Selling Shares or Equity Mutual Funds
Only after 1-year holding (Long Term Capital Gains)
Maximum Tax-free Gains: Rs. 1 Lakh
If you invest in stocks or mutual funds then you can make your profits 100% non-taxable up to Rs. 1,00,000.
For example, if you have invested Rs. 100,000 in TCS stock and in 11 months your investment becomes Rs. 1,20,000 then you have to pay tax on 20,000 profit.
However, if you hold it for another month, then you are not liable to pay any tax on the profits (up to Rs. 1 Lakh).
Same is applicable to equity mutual funds.
Remember any long term capital gain over Rs. 1 Lakh attracts a tax of 10%. Further, in such case, you will not be able to avail indexation benefits.
Expert Tip – If you have long term or short term loss in equity, make sure you file your return in time so that you can carry forward your losses.
You will be able to set off future gains against these losses. But you will not be able to carry forward any losses if you miss the return deadline date.
#6. Amount Received as Gifts on Marriage
Tax-Free Income Under Section: 56(2)
Gifts received (through cash/cheque/gifts) on marriage are totally tax-exempt.
You will not have to pay any tax on the gifts that you receive from your relatives, friends, and family on the occasion of your marriage.
#7. Agriculture Income
Agriculture Income exempted u/s: 10(1)
Any income derived from Agriculture land is tax-free in India. The agriculture income can be:
- Any rent or revenue derived from land. For example, fees received for renewal of grant of land on lease.
- Income from agriculture products i.e produce resulting from basic operations like the cultivation of land and subsequent operations like harvesting.
- Income from a farm building required for agricultural operations like a storehouse
#8. Money Under VRS
Tax exemption as per Sec 10(10C)
Voluntarily Retirement Scheme – Up to 5 Lakh
Only applicable for employees of public sector company or of authority established under Center or State Govt, University or IIT.
If any employee takes voluntary retirement then the amount received is non-taxable with the upper limit of 5 Lakh.
#9. HUF Account for Secondary Income
You can take the benefit of tax saving under the HUF account if you have any additional income through the joint family property.
The property can be ancestral property or any other property acquired with the aid of ancestral property. You can pay tax on your salary under your name and deposit secondary income into the HUF account.
Hindu Undivided Family (HUF) status is available to Hindu, Sikh and Jain families in India.
You have to get a separate PAN and bank account number. Income Tax Department considers HUF as a separate entity for taxation purpose.
For example:
You have 500,000 income from your salary and 50,000 income from rent through the ancestral property. Then you can show rent income from family property as income of the HUF.
You can save tax on both of your entities by investing in various tax saving options like under section 80C. You will virtually pay no taxes on your secondary income if you invest in tax saving instruments.
#10. Inherited Amount Through Will
There is no inheritance tax in India.
So any property that you get from your parents or uncles through WILL is not taxable in your hands. It becomes your legitimate non-taxable income.
#11. Tax Saving Options Under Section 80C
Maximum Benefit: Rs. 1.5 Lakhs
You must be aware that Section 80C offers a maximum deduction of up to Rs. 1,50,000. A few of the options are as follows:
- Public Provident Fund
- National Pension Scheme (NPS)
- Life Insurance Premium
- National Savings Certificate
- ELSS Mutual Funds (Equity Linked Savings Scheme)
- Principal Amount Repaid on Home Loan
- 5 year fixed deposits with banks and post office
- Sukanya Samariddhi Account
- Tuition fees paid for children’s education, up to a maximum of 2 children
ELSS mutual funds are one of the best tax-saving options under 80C, due to lesser lock-in period and the high potential return on investment.
#12. Tax Savings on Additional Contribution to NPS
Income Tax Section: 80CCD (1B)
Max Tax-free Amount: Rs. 50,000
Additional contribution towards NPS can fetch exemptions over and above the regular deduction of Rs. 150,000.
You can claim a deduction of upto Rs. 50,000 by making an additional contribution to NPS.
#13. Money Received From Provident Funds (after 5 years)
You will save tax on investments in Provident Account in the year of investment. The good news is that you don’t have to pay taxes on interest received from EPF/PF investments (note that Interest received on Fixed Deposit is taxable).
You have to keep your Provident Fund active for at least five years before you start withdrawing money (however not recommended unless an emergency). Otherwise, PF withdrawal money will be taxable.
Note – Withdrawals before completion of 5 years are not taxable if withdrawals are due to discontinuation of employer’s business or service termination due to employee’s ill health or any reason beyond the control of the employee.
#14. Tax Saving From Home Loan
Get Deductions u/s: 80C, 24, 80EE & 80EEA
Use your home loan efficiently to save more tax. There are five ways to get an income tax deduction on your home loan(s).
- The principal amount repaid in the current financial year is included under section 80C, offering a deduction up to Rs. 1,50,000.
- The interest portion offers a deduction up to Rs. 2,00,000 separately under section 24.
- Benefit on interest on home loan for First Time Buyers – Rs. 50,000 under section 80EE
- Benefit of interest repayment for first time affordable home buyer – Rs. 1.5 Lakh under section 80EEA. Exemption can be taken either under section 80EE or 80EEA.This deduction is over and above the deduction of Rs 2 Lakh for interest payments available under Section 24.
- If you are living in the home on which you took a first home loan, you can get another loan for the second house. There is no limit on income tax deduction on the interest payment of the second home loan. Very few people are aware of this benefit of tax saving on a second home loan.
Deduction under section 80EEA is in addition to the Rs. 2 Lakh limit allowed under section 24.
So if you can meet the conditions of both sections 24 and 80EEA then you can claim Rs. 2 Lakh + Rs. 1.5 Lakh = Total Rs. 3.5 Lakh in the deduction.
#15. Tax Savings on LTCG on Sale of House Property
Under Section: 54
In order to claim full amount of tax exemption, the entire long term capital gains have to be invested in:
- Up to two new residential house property that must be purchased or constructed
- The new residential property must be purchased either 1 year before the sale or 2 years after the sale of the property/asset.
- Or the new residential house property must be constructed within 3 years of sale of the property/asset
- The capital gains must not exceed Rs. 2 Crores
- Tax exemption can be claimed once in a lifetime.
If the entire long term capital gains are not invested, then the amount not invested is charged to tax.
#16. Tax Saving on Education Loan
Max Tax Savings: No upper limit
Under Section 80E – Interest paid on education loan is also non-taxable. There is no upper limit on the amount.
No tax benefit is applicable for the principal repayment.
The education loan for higher studies is applicable for the deduction if taken for self, spouse or children.
#17. Medical Insurance
Tax Savings u/s Section 80D – Deduction for the premium paid for health insurance
Deduction of Rs. 25,000 for medical insurance of self, spouse and dependent children.
Additional deduction of Rs. 25,000 for medical insurance of parents less than 60 years of age. Rs. 50,000 in case the parents are more than 60 years old.
In a rare scenario, if the age of the taxpayer and his parents are 60 years or above then the maximum deduction you can have is Rs. 100,000.
For example, if the age of Ram is 61 years and that of his father is 92 years. Then Ram can claim a deduction of Rs. 1 Lakh.
Note – Deduction of Rs 5,000 for any payments made towards preventive health check-ups is also included under section 80D. But the deduction amount will be included within the overall limit as indicated above.
#18. Medical Treatment of Disabled (Handicapped) Dependent Relative
Applicable Section: 80DD
You get a fixed deduction of Rs. 75,000 in case of 40-80% disability. In case of severe disability (more than 80%), you can claim a deduction of Rs. 125,000.
The expenses should be:
- incurred on medical treatment, training, and rehabilitation of handicapped dependent relative.
- towards payment or deposit to specified scheme for maintenance of dependent relative.
You will require a certificate of disability from medical authority to back deductions.
#19. Medical Expenses of Disabled Individual
Deduction u/s: 80U
Any individual who suffers from a physical disability or mental retardation can claim a fixed deduction of Rs. 75,000.
In case of severe disability, deduction of Rs. 125,000 can be claimed. Here also you will require a certificate of disability from medical authority to support the deductions.
#20. Medical Treatment of Specified Disease for Self or Dependent Relative
Applicable Section: 80DDB
Deduction of Rs. 40,000 can be claimed in respect of any expenses incurred towards specified medical disease. In case, if you are incurring expense on behalf of, dependent senior citizen, then deduction up to Rs. 1 Lakh can be claimed.
You will require a certificate of disability from a specialist working in a government hospital to back deductions.
Specified Disease:
- Neurological diseases like Dementia, Aphasia, Parkinson’s, and others
- Malignant Cancers
- AIDS
- Chronic Renal Failure
- Hematological disorders like hemophilia and thalassemia.
#21. Donations
Tax Savings Under Section 80G
Donations to specified funds or charitable institutions. You need to retain the stamped receipts of the donations and make sure the charitable organization is registered.
Donations made in cash up to Rs 2,000 will be allowed as deduction.
The donations above Rs 2,000 should be made in any mode other than cash to qualify as a deduction under section 80G.
#22. Donations to Political Parties
Exemption U/S: 80GGC
Max Exempted Amount: No upper limit
Your donations to political parties qualify for 100% deduction. There is no upper limit and all the donation amount can be claimed as a deduction.
You can avail this deduction if you pay by any mode other than cash.
#23. Interest Paid on Purchase of Electric Vehicle
Exemption U/s: 80EEB
Max Exempted Amount: Rs. 1.5 Lakh
The interest paid on the loan taken for the purchase of an electric 2,3 or 4 wheeler can be claimed as a deduction up to Rs. 1.5 Lakh.
To be eligible for deduction the loan for the purchase of an electric vehicle must be sanctioned between 1 April 2019 till 31 March 2023.
Tax Savings Tips for Business Person in India
#24. Distributed Profit to Partners in Partnership Firms
There is no tax in the hand of partners if their partnership firm is making profits and partners decide to distribute profits among themselves.
Partners get tax benefits because their partnership firm has already paid taxes on the profits.
#25. Travel/Hotel Expenses in Business
Business owners can file travel and hotel expenses as business expenses to save tax. Businessmen never pay for travel from their salary but from the company account.
#26. Food Expenses in Business
Similarly, business owners need to meet so many people like customers, vendors, and potential hires. Often he spends money on paying bills on food.
They save tax by showing all food expenses as the business expense.
#27. Leave Travel Allowance
Under Section: 10(5)
Employees can utilize Leave Travel Allowance for the expenses on domestic vacations. This policy covers the expense of travel tickets for yourself and your family.
You will not be taxed on the travel expenses of your spouse, two children and parents if they are part of your journey. Brother or Sister are covered only if they are solely dependent on you.
You can avail of this facility twice in the block of four years. If you were unable to claim the benefits in four year block then you can carry over one LTA in the next block, provided you avail in the first year of the block itself.
Below are the scheme details as per memorandum to the Budget 2021 –
- Exemption under the scheme available for FY 2020-21
- Usage of 1 trip out of 2 allowed will be counted if you avail the scheme
- Exemption amount should not exceed Rs 36,000 per person or 1/3rd of the ‘specified expenditure’, whichever is less
- Specified expenditure’ should have been spent on the purchase of goods or services that attract a GST rate of 12% or more
- Purchase should have been made between 12th October 2020 to 31st March 2021.
- Payment for the expenses should have been made via electronic means and a ‘tax invoice’ should be kept.
- If you don’t avail the scheme, then your employer will either allow you to carry forward the amount to next year or pay it to you after deducting TDS.
#28. House Rent Allowance (part of salary)
Applicable Section: 10(13)
You can claim HRA to save tax on your house rent. This is applicable only if you are not owning any house near to your office. You must be living in rented space and should receive rent receipts from the house owner.
You have to submit a PAN card copy of your landlord if you are paying more than Rs. 100,000 annual rent.
If HRA forms part of your salary, then the minimum of the following three is available as exemption:
- The actual HRA received from your employer
- The actual rent paid by you for the house, minus 10 percent of your salary+DA (including your allowances)
- 50 percent of your basic salary+DA (for a metro) or 40 percent of your basic salary+DA (for non-metro).
#29. HRA (not part of salary)
Deduction Claimed u/s: 80GG
Applicable in case your employer does not give HRA and other conditions of rent are met. If HRA is not part of your salary, the least amount from the below three options can be claimed as a deduction.
- Rent paid minus 10% of the total income
- Rs. 5000 per month
- 25% of total income
#30. Income From Gratuity
Maximum Tax-free Amount: Rs. 20 Lakhs
Gratuity received on retirement or on becoming incapacitated or on termination or any gratuity received by his widow, children or dependants on his death is exempt subject to certain conditions.
The maximum amount of exemption is Rs. 20 Lakhs.
#31. Meal Coupons
You can ask your employer to issue meal coupons for you (like Sodexo) as Rs. 50 for two meal coupons are not taxable. Suppose, you have 26 working days then you can save up to Rs. 2600 per month.
Rs. 50 coupon per meal x 2 meals x 26 working days = Rs. 2600 per month i.e. Rs. 31,200 annually
#32. Standard Deduction
Maximum Deduction: Rs. 50,000
For the current financial year, you can avail of a standard deduction of Rs. 50,000.
The standard deduction replaced the earlier non-taxable benefits of daily travel allowance and medical expenses.
#33. Company Leased Car
Check with your employer if they have a car lease policy. In that case, you can drive the company leased car to save tax on car EMI & fuel.
#34. Telephone/Internet Expenses
Your company may not be reimbursing your telephone or internet expenses but may have any policy to make these expenses tax free.
Telephone or internet expenses can be claimed only if provided by your employer. You can ask your employer to provide telephone expense reimbursement.
#35. Rebate Under Section 87A
If you are a resident with a total income of less than Rs. 5 lakh (after deductions), then you get a tax rebate of Rs. 12,500. This means that if your tax payable is less than 12,500, you do not have to pay any tax.
You cannot claim any rebate if your tax payable is more than 12,500.
For instance, if the tax payable is Rs. 10,000, you can claim a rebate of 10,000 and pay no tax. But if your tax payable is 40,000, you cannot claim any rebate and will have to pay the entire 40,000.
Conclusion
I have shared all the ways of saving taxes on your hard earned money.
You should start tax planning and investment as early as possible. This will help you save more money, get control of your finances and build a tax-efficient wealth corpus in long term.
In case of queries, let me know in comments.
Hi,
My company don’t offer below options , is there any way that I can avail them directly ?
– Company Leased cars
– Meal coupons/ Food prepaid card
– Telephone/internet expenses
Thanks
Swapnil G
Your tax saving suggestions are very useful
my mother has brought vacant land in Bangalore in 1995. 22 years land. we are trying to sell land for Rs. 30,00,000/- to the party. My mother age is approx 55 – 59 years.We have taken the land approx Rs.1L in 1995. Please inform whether we need to pay income tax. if my mother divides the property amount into 3 equal amount (son, daughter, parents) whether even we need to pay tax. tax. Also please inform how to exempt tax. We are very poor and trying to sell land for marriage of my 2 siblings.if we are going to gift the amount for my sister daughters income tax can be exempted. please inform. We are gifting the amount to my Sister and there 2 daughters for their marriage.
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Hello Sir
First all of you thank you so much for your help and I’m suggesting that please update above mentioned as per Income Tax assessment year 2017-18.
how to save income tax more than 1.5lac?
You can invest in NPS for additional Rs 50K.
Thank you Mr. Pardeep Goyal this blog is very use full for me.
Nice Blog !!.
Thanks for giving these useful tips.I am new in this field but i have learnt many things.
Thanks once again.
I have housing loan paying around 4 lac as interest per year for the new house purchased at my home town but i work at Bangalore and staying in rented house .
With current financial year 2017-2018 am i eligible to get tax rebate for the entire 4 lac or this year budget restricting us to get tax rebate only for 2 lac
Interest in housing loan directly minus from your gross salry (annual package) and principal in 80c .u r enjoy these any part of India also house rent if rent agreement and follow the term and condition
Dividend income received in excess of 10,00,000 will be taxable.
Truly helpful
I am a govt. employee. I had LIC of 1lakh,ppf of 1000yrly.,vpf&pf of 10000 monthly, home loan of 10,0000,what else can I do to reduce my tax?
Choudhary ji ur question is not clear but u can save 150000 in 80c and 50000 in nps and 200000in home interest .15000 in medical .if u have child tuition fee is also exemption.
Beautiful post, it is very helpful!
Thanks Pardeep 🙂
Very informative article Pradeep, Is there anyway we can refile IT returns of previous 5-10 years.One pays tax for all the 10-15-20 years when in employment.If they are not working(No Job),Is there anything that the persons can expect back from govt when he is not having any income after paying tax for all the previous years.
The maximum amount of exemption from Gratuity is Rs. 10,00,000 not Rs. 3,50,000
Hi Pardeep can you share your personal email id so that i can ask you questions about tax saving ways for my business?
What r document required to submit to get leave travel allowance and daily travel allowance for tax saving.
how to get taxbenifit from parental treatment-tunabam722gmail.com
these tax saving suggestions are helpful
HUF account can be used for freelancing purpose ?
Yes, HUF account can be used for freelance and business income.
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My mother owns a small plot in bangalore, I am planning to construct a house(G+3 floors) on this plot after getting gift deed executed to my name as this helps me procure a home loan and I am not considering to apply for joint loan. Also my parents will be providing their savings to help me for the construction. My parents will be living on 1 floor and me on 1 floor and plan to rent out the remaining 2 floors. I would like this rental income paid solely to my parents.
My question is since I have taken a home loan, I would be obliged to declare rental income from property in my tax returns and I fall in 30% tax bracket. Is there a provision that I can promise the rental income of the 2 floors to my mother and she would be declaring in her tax declaration. If possible how do we execute this in a legally accepted document else what options do I have? Please suggest. Thanks in Advance
In my opinion it would be difficult. Yiu should get professional advice from a CA.
Just wow….very nice and detailed content piece. You got one subscriber today! 🙂
Hi Pardeep
We have a partnership firm in education sector since 2011. We have never filed income tax since we were facing losses. But the business is growing recently and we are sure we will do well. From the next year we wish to make everything digital and pay taxes properly.
We wish to start everything fresh including all partnership deeds, lease agreements, company name (slight alteration to keep things same) etc. Is it advisable?
Thanks
I am a businessman. If I show hotel & restaurant expenses as business expenses and pay by company debit card, do I still need to preserve all the hotel & restaurant bills?
Hi Pradeep, Nice article.
One question. I am a salaried employee and used all of these options still paying a lot of tax. Recently i started stocks/options buying and lost 2.5L in it.
Now how can show these 2.5L as loss and reduce my tax payment.
Thanks in Adv
I want some clarification of #17. Because I want to start a new business with my wife as a partner. I want to know from you that is a partnership firm is more tax-beneficial than a proprietorship firm?
proprietor always
Hi Pradeep, I am a Salaried Person earning more that the exemption level. However can I open a HUF and invest all the taxable income generated from the Salary Source and Invest, show my expenditure for my family.
Thanks in advance
Sorry, You can not invest your salary money into HUF account. You can only re-invest your HUF earnings into HUF assets.
I have one business on the name of my HUF.
I have my personal income into my personal account.
Hello friend,i have trucks under loan .if i pay off the loan amount with old currency .is there any problem
If banks are accepting old currency for loan then you can pay. No need to be afraid if you are not owning black money.
Hi I’m salaried person, but I have another savings account in which I have done investment and every month on an average I’m getting 30k to 45k per month as an Income and every now and than I will be depositing some cash amount in my account. So do I need to declare this income. I’m also paying home loan amount of Rs.16k per month. Plz suggest.
You have to declare all your income, no matter from which source you are receiving.
You can save income tax by picking any of above mentioned ways.
can i get tax deduction for tution fees of my brother in law if so how much will be the limit
I don’t think it’s possible.
Dear Mr. Pradeep Goyal,
I have started consultancy in the month of September as a proprietor with 0 employee.
Now, i have 2 employees and getting salary through cheque but Shop & Establishment certificate is showing 0 employee. Shall i eligible for tax benefit without making any changes or i have to revise the Shop & Establishment Certificate to get tax benifit ???
Please advise….
Thanks / Regards,
Jogendra Prasad
I am not very sure about that. But logically you should not report that to any govt. department. You can keep on hiring and firing employees and put their salaries as expenses.
Dear Pradeep,
Very nice article on Saving Income tax in India.
Would request you to add Ticket Restaurant Meal card in point no. 23 which is for Meal Coupons.
Regards,
Shiv
Hi! Recently I have resigned from my organisation to start my own business.is my final settlement can anyhow be tax free so that with that money I can start my own setup….plz guide way forward
No, you have to pay taxes on your final settlement amount.
Hi Pradeep,
I am salaried person and half of my income i give it to my parents. My parents use that money for their expenses in house and some part for my fathers business. So can i exempt this money which i give to my parents from Taxable income ? If so how can i do that. Many of my colleagues have the same question and they are also sending money to their parents. If there is a solution it will be helpful to many people here in my company.
Thanks
You can not get tax exemption on money you send to your parents – it’s a bad news for salaried person.
However, if you were a business guy, you could hire your parents in your company and pay them salary. That would be deducted from your revenue as employee salary.
Business people have a ton of advantages over salaried people.
I’m a CA student. I want to know if a person who earns profit from sale of investment in mutual fund nut the mutual fund account on the name of his business then can he show their profit in his personal books not in business books?
In my opinion, it depends from where your money is coming for MF investment. Also, depends on what kind of business entity you have (Proprietorship vs. pvt ltd).
Suggest you to seek professional advice from a CA.
I WILL START MY COACHING CLASSES
IF I GET 30,00,000 AS FEES
RUNNING COST- 6LAC
TO SAVE TAX
CAN I GIVE SALARY TO TWO PEOPLE 12.5LAC EACH
ONE OF THEM BEING ME AND OTHER TO MY GRANDPARENT
AND DECLARE BUSINESS PROFIT AS 0.
Consult a professional CA. Would you be able to convince the tax guys in case of audit?
YES MR.Kartik you can pay 12.5 lac to each i,e you and your grand parent
But you have to deduct TDS on both payments,
After that while filing returns you have to pay tax on these amounts .
I suppose, you are staring a proprietorship. In that case, it does not matter if you salary to yourself. Further, salary to grandparent will be eligible for tax break if it remains unexplained that he is contributing to your business for which just salary is justified.
hi,
I am a lawyer and i wanna start practice in taxation.I have no idea about taxation.Is there any online course which i should join to start consulting in taxation.
I have no idea about taxation course, but you can find good coursed on udemy.
Hi… I am a salaried person. If I am hiring a driver or a person for helping me. Then can I show his salary in my expenses.. If yes, then under which section ?
Thanks
No. A salaried person can not show driver salary as direct expense to save taxes.
However, you can check with your company if they have company car lease policy, under which you may include your driver’s salary as travel expense. It all depends on your company policy.
I am salaried person. Suppose if I want to start Consultancy firm with investment from my salary. Can I avail tax benifit for the amount I invested in my startup.
You can not get tax benefits on invested amount in your company.
Infact no direct tax benefit in any form… but you can less your expenses from company revenue, to pay tax on profits only. Indirect way of saving tax if you are a business owner.
Hi,
For business person, would the driver allowance too come under tax benefit? Meaning if he has a car with driver and he pays driver’s monthly salary, can he show the same as valid expense?
Driver’s salary is valid business expense.
Hello Pardeep,
I am employee of a Car Rental Company In Delhi with a salary of 40K p.m.
Parallel y, I am Helping my wife’s to run a small Company under Proprietorship ( That’s also a Car Rental Company ).
All documents are registered under her name and have 2 Cars are already financed on her name ( One 3 yrs old One 1.5 years Old ). Her ITR Value is some what 6.5 lakh for last year.
Due to many implications she keeps low health and many other health issue she can’t take proper care of her business.
a) Can I take over her business officially ( How to keep her also in company and my name as well with an existing company or a new company is to be formed , where I can use the benefits of my wife’s company name as her cibil and track record is very good). If needed do we have to start a new company as PVT Ltd or LLP ?.
b) Can I start a new company on my name being an existing employee ?. If yes than how ?.
Please advise.
Awaiting reply.
Dear Sir
I am a lab scientist working with a pharmaceutical company here in the United Kingdom. I am contacting you to offer you a business supply contract. The business supply contract is all about buying some pharmaceutical herbal seed raw materials at cheaper rate right there in India and resell them to our company in higher rate.
I have been in this business supply contract with an Indian man for many years but his mobile number was switched off since after the earthquakes in North East India which happened on January 3, 2016 and i presumed that he is no longer alive, then i contacted you because my company is in need of this herbal seed right now.
My company used to purchase the herbal seed from the presumed dead India man when he was alive until his death.
I shall use my position to influence you as the Indian man’s business partner, so that my company will maintain the cordial business relationship with you and at the same time buy the herbal seed raw material from you. This business supply contract is an additional opportunity for you as it will not affect your existing profession.
Meanwhile, i shall give you the farmer’s contact information where you will buy these herbal seed at very cheap rate in India. Then you will sell the same herbal seed raw material at higher rate to my company delegate’s whom shall visit you in India from the U.K.
Your role is to buy the raw material from the original farmer in India at cheaper rate of (£1,500) about Rs/1,50000 in India currency and at the same time resell the same herbal seed raw material to our company’s delegate at higher rate of (£4,500) about Rs/4,50000 in India currency. This is continuous business supply contract.
Mind you, the profit margin is high; You and I will share the profit after each supply at ratio of 70/30, that is 70% for you as middleman and then i will come to India to take the remaining 30% as my reward for giving you this business opportunity.
This is legal and lucrative business supply contract and i will give you more details if you are capable to handle this business supply contract with my company.
johnmorris939@gmail.com
Morris John
Address: 39 York Road, London, SE1 7NQ, United Kingdom
I am Interested John,
My brother is owner of a Window Glazing company in U.K.
He will contact you after verifying your details in U.K. I am India ( New Delhi ) based and running a Car Renal Company In India.
My Name is Jaswinder,
I think you have missed out investment under 80 CCD(1b) – NPS, a salaried person can invest 50,000 over and above 80 C 1.5 Lakh limit. It is big amount for investment and tax saving.
Yes, That is one way of saving tax. Thanks for your comment.
Hie..
Greetings !
Glad to read your relevant articles of information on regular practice of income tax.
I have question ..
My dad having proprietor firm and turnover is 2 cr and taxable income is coming up to 30 lakh after all expenses and deductions of 80c and 24 also. We would like to save tax but it looks difficult. I thought..
If we convert proprietor firm into partnership firm inbetween 4 (father + 3 sons) then is possible to bring down taxable income by 3 more times by dividing it into 4 and 4 are having their own benefits of 80c and 24.
Kindly suggest or guide.. coz coming year it will be double..
Hi,
I have 3 practical issues, off-course it will be helpful to boost up our knowledge, these are
1) I have taken some personal loan and it is using for the construction of a house, so is it eligible to take tax benefit U/s 80G, i have gone through the section it is showing we can take but subject to proof of evidence whenever asked by the department.
2) I am using post paid mobile plan, where as the owner of that mobile is on my friends name. So can i get the deduction on my mobile bills which is debiting through either my debit or credit card only. But the problem is it was in the name of my friends name.
3) this is similar to 2, i am using wifi (internet) my room this is also in the name of my friend name only, where as every month amount is deducting from my account. So can i get the eligibility to deduct actual amount paid from my account.
So could you please look into that and let me know the answer along with proper sections to reverify it.
Thanks & regards
CA. Subrahmanyam
Subrahmanyam,
Unfortunately you will not be able to get any benefit in all three scenarios.
#1. You should have taken home loan if you want deduction under 80G.
#2. Check with your company if they provide tax benefit on mobile and wifi bills, if yes, transfer the connections on your name.
sorry to interupt.
80G is for Donation. Not for Home loan.
For home loan you can can deduction u/s 80C
for interest u/s 24
I am interested in those people who come under 30% slab and want to save complete 30% tax. Even their unaccounted money can be made accountable with minimum expenses.
Hi Pardeep
I think you did not miss any other point and this article brings all the tax related aspects at one location for people like me to read. Great Job.
I just need some clarification regarding point #1, I was always under the impression that the moment interest income goes up 10k, one has to pay tax on the entire amount including first 10k.
Hey Abhinandan,
I am glad this article is helpful to you. You don’t have to pay tax on the entire amount if interest goes over 10K. If you earned 12K interest on saving accounts in a financial year then you have to pay tax only on 2K.
However, in case someone gift you money, it is non-taxable upto 50K per annum but you have to pay tax on the entire amount if gift amount is more than 50K.
Hi Pardeep,
I want some clarity on #20 (Leave Travel Allowance).
As u mentioned “This policy covers the travel tickets and hotel expenses for yourself and your family.” I want to know about hotel expenses, as our company is accepting only travel tickets. Can you please share some link, if u have any?
and who is covered in family – Parents and Parents-in-law as well.
Hey Nischal,
Thanks for bringing this point in my notice. I checked and found my mistake. LTA is applicable for travel tickets only (not hotel expenses).
Spouse, two children, Parents are covered under LTA. Brother or Sister are covered only if they are solely dependent on you. Your Parent-in-laws are not covered, but your wife can also claim LTA and get her parents covered under her LTA if she is working.
I hope that point is clear now. I will update the article.
Thanks for catching this error.
What are the tax exemptions available for persons suffering from serious ailments. For example Cancer. Under which rule are these exemptions available? Please advise.
Thanks
Hi AK Anand,
These exemptions should be available to everyone (as per eligibility) but I am not sure of extra exemptions for people suffering from serious ailments. I will do my research and update you.
Thanks for asking this questions.