Introduction
Lets see 5 Smart Ways to Save Tax Without Any Investment in 2024!
Normally, in order to save tax, we all invest in tax-saving financial instruments such as ELSS (Equity Linked Saving Schemes), National Pension System (NPS), Public Provident Fund (PPF), National Savings Certificate (NSC), tax-saving fixed deposit, life and health insurance policies, and so on.
However, at times we face financial crunch. We want to save on our tax outgo but don’t have money to invest.
No worries now.
There are still some options that can assist us in lowering our tax bill without requiring any investment.
Some of ways are discussed below:
1- House Rent Allowance (HRA) Under Section 10(13A)
If you are a salaried individual living in rented housing, you can save some tax by paying rent to the landlord.
If your employer provides you with a house rent allowance (HRA), you can claim an exemption for the rent paid under the provisions of Section 10(13A) of the Income Tax Act.
In the case of other individuals, and where no HRA is received by the employee, a deduction of up to Rs 5000 per month can be claimed under Section 80GG of the I-T Act for rent paid in respect of accommodation occupied by the individual for his own residence (subject to prescribed conditions).
2- Deductions For Medical Expenses of Senior Citizen Parents U/S 80D
Section 80D allows you to deduct premiums paid for health insurance policies for yourself, your spouse, dependent children & parents.
You should buy health insurance for everyone in your family, but even if you don’t, you can claim deductions for preventive health check-ups up to Rs 5,000.
Furthermore, healthcare expenses incurred by you as a senior citizen or by you for your senior citizen parents can be deducted up to Rs 50,000 if the senior citizen is not covered by health insurance.
3- Deductions for children’s tuition fees under section 80C
Expenses for our children’s education consume a significant portion of our income.
As a result, maximising the tax benefits associated with these costs (children’s education ) makes a lot of sense.
Parents can claim a tax deduction of up to Rs 1.5 lakh for tuition fees paid for their children’s education under Section 80C of the Income Tax Act.
Remember that this benefit applies to any full-time education program offered by any registered institution, including schools, colleges, and even pre-schools and nurseries.
Tuition fees paid for up to two children per taxpayer do not qualify for this benefit (i.e. a couple consisting of two individual taxpayers may avail of this benefit for up to four children).
Furthermore, this benefit only applies to the tuition fee and not other payments such as development fees, late payment fees, and so on.
Furthermore, if your employer provides a children’s education allowance and a hostel expenses allowance, you can claim tax exemption on these allowances up to Rs 1,200 per year and Rs 3,600 per year for up to two children.
👉 READ MORE: Tax benefits on home loan
4- Increase your EPF contributions with VPF (Voluntary Provident Fund)
We all know about EPF. It stands for Employee Provident Fund.
Salaried persons contribute 12% of their basic salary and DA (Dearness Allowance) into EPF.
Besides this, employee has an option to contribute amount top of EPF.
This can be done by means of VPF (Voluntary Provident Fund).
100% of their basic salary and DA can be contributed in VPF by an employee.
Anyone who is keen to opt for this, can contact their HR department and express their desire to participate in VPF.
Please note that employees are eligible for tax deductions of up to Rs 1.5 lakh under Section 80C for their EPF and VPF contributions.
5- Principal & Interest on Home Loan (Under Section 80EE)
Taking out a home loan is perhaps one of the best and known ways to save money on taxes.
It offers a number of deductions.
Ordinarily, you can deduct up to Rs 1.5 lakh from the principal repayment of a home loan under Section 80C and up to Rs 2 lakh from the interest repayment under Section 24B.
Under 80C, you can prepay the principal and earn exemptions of up to Rs 1.5 lakh, avoiding the need to purchase additional tax-savers.
You may be eligible for additional tax deductions of Rs 50,000 under Section 80EE or Rs 1.5 lakh under Section 80EEA on your loan interest repayment depending on the property you’ve purchased, the amount you’re borrowing, and the year of your loan sanction.
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