Tax Savings | Meaning and Definition

What is Tax Savings?

Income from any source like business, investments, salaried income, rental income, etc., is taxable. Tax saving refers to the practice of saving taxes by creating investment declarations. Nonetheless, different sections of the Income Tax Act enable deductions under the stipulated directives. 

  •   Section 80C lowers tax liabilities by permitting deductions from gross taxable income in a fiscal year, given that the investments lie under the following expenses and schemes:

–  Senior Citizen Savings Scheme

–  Equity Linked Savings Scheme

–  Public Provident Fund

–  Tax-Saving Funds

–  Tuition Fees

–  Home Loan Repayment

–  National Pension System

–  Term Life Insurance Premium

–  National Savings Certificates

–  Tax-saving FDs

 

  •   Section 80CCD mentions deductions for investments done in the National Pension System (NPS) which results in tax savings.
  •   Section 80D enables tax savings on repayment of education loans.
  •   Section 80E permits deduction on repayment of home loans for first-time buyers.
  •   Section 80G permits deductions made to charitable institutions sanctioned under the Income-tax Act.
  •   Section 80GG permits deductions for HRA begotten as a rent reimbursed for unfurnished or furnished accommodation or as a part of the salary.
  •   Section 80TTA permits a claim of Rs. 10,000 deduction on the interest income. However, this deduction is accessible to HUFs and individuals conditionally.
  •   Section 80DD allows deduction if you have someone who is dependent on you entirely or is differently abled for maintenance.
  •   Section 80U permits individuals who have been attested to be at least 40% disabled by germane clinical authorities as per the government’s rules to assert tax benefits.
  •   Section 80DDB permits deductions on medical expenses induced due to particular conditions mentioned under the section.

 

Income taxes are a crucial duty levied on eligible citizens to ensure that the government of a country runs smoothly and its residents get the required resources. Thus, one must consider their responsibility instead of a burden.