Just 27 days for year ending! Have you invested enough to save tax?

As the year comes to a close with only 27 days left, it’s a good time to reflect on your financial situation and consider ways to save money. One area where you can save a significant amount of money is by minimizing your tax liability. In this article, we’ll discuss some tips on how to save tax and why it’s important to do so. Only if you have opted for Old Regime!

First and foremost, it’s important to understand the importance of saving tax. Taxes are a necessary part of our financial system, but paying too much in taxes can be a burden on your finances. By taking steps to minimize your tax liability, you can keep more of your hard-earned money in your pocket.

Here are some tips on how to save tax:

1. Contribute to a retirement account: By default salaried individuals contribute towards EPF (Employee Provident Fund) and many invest in PPF (Public Provident Fund) as well. But we also have NPS (National Pension System), APY (Atal Pension Yojana) and VPF (Voluntary Provident Fund). Whether you invest in EPF, PPF or VPF these all are considered under 80C Section of IT Act which has a limit of Rs 150,000. However, we have additional option to invest in NPS or APY, which allows us to avail deduction by investing Rs. 50000 which is over and above Rs. 150,000 deduction available under 80C. Both NPS & APY deductions can be availed under 80 CCD (1B). This can help reduce your tax liability while also saving for your future.
2. Take advantage of Exemptions: There are various exemptions available for specific expenses, such as LTA, HRA, Children Allowance, Books & Periodicals. These exemptions can help reduce your tax liability.
3. Donate to charity: Charitable donations can be deducted from your taxable income. Not only are you supporting a good cause, but you can also reduce your tax bill.
4. Consider tax-loss harvesting: If you have investments that have lost value, you can sell them and use the losses to offset gains from other investments. This can help reduce your tax liability.
5. Maximize your deductions: Make sure you’re taking advantage of all the deductions available to you, such as 80 C (150,000) 80CCD (1B) (50,000), 80 D (25,000), LTA, HRA, 80G, 80GGC, Section 24 etc, you can find list here.

By following these tips, you can save a significant amount of money on your taxes. It’s important to keep in mind that tax laws can change from year to year, so it’s a good idea to consult with a tax professional or do your own research to ensure you’re taking advantage of all the available tax-saving strategies.

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In conclusion, saving tax is an important part of managing your finances. By taking steps to minimize your tax liability, you can keep more of your hard-earned money and put it towards achieving your financial goals. So as the year comes to a close, take some time to review your finances and consider ways to save tax.