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What are the various ways of savings to avoid income tax?

I draw a salary of 3.8 lacs per annum, what is my taxable income and what are the possible ways of saving tax?

  • by claiming tax rebate under sections of IT. I did to avoid tax

  • Answer:

    Investing in Home Loan Intrest component 1,50000 free Capital from this home loan free up to 1,00,000 Net tax zero !

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YOUR TAXABLE INCOME IS 3.8 -1.1 LACS, I.E. 2.7 LACS, OF THIS YOU CAN CLAIM 80C BENEFITS BY INVESTING 1 LAC IN RELATED INVESTMENTS, WHICH ARE HAVING I.T. EXEMPTIONS UNDER 80C - THESE ARE LIKE LIC, OTHER INSURANCE SCHEMES, PPF, AND ELSS - MUTUAL FUND SCHEMES. THEN ON THE BALANCE 1.7 LAC, NO WAY OUT YOU HAVE TO PAY THE TAX WHICH WILL BE ABOUT Rs.2000/-.

B R

You can download Income Tax calculator from the following site which can help you to calculate your income tax. http://www.ynithya.com/taxcalc/

hitesh b

You did not tell your tax status (Male or Female). If you are a male. (Tax exemption Rs.1,10,000) 04,000 tax Between 1.1 to 1.5 lakhs @10% on 40,000 20,000 tax Between 1.5 to 2.5 lakhs @20% on 1 lakh 39,000 tax Above 2.5 lakhs @30% on 1.3 lakhs ---------- 63,000 Tax (Before Tax savings) 01,890 Education cess @3% on Rs.63,000 ---------- 64,890 Net Tax (before tax savings) ====== Now if you save tax by way of investing under sec.80C: 3,80,000 is your Salay 1,00,000 is your tax savings u/s 80C ------------ 2,80,000 ======= 04,000 tax Between 1.1 to 1.5 lakhs @10% on 40,000 20,000 tax Between 1.5 to 2.5 lakhs @20% on 1 lakh 09,000 tax Above 2.5 lakhs @30% on 30,000 ---------- 33,000 Tax after saving 1 lakh u/s 80C 00,990 Education Cess @3% on tax Rs.33,000 ---------- 33,990 Net tax after savings u/s 80C ====== If you invest one lakh in 80c investments you will save a tax of Rs.30,900 (Male). More details about 80C investments: http://www.rediff.com/getahead/2005/dec/26tax.htm If you are a female: (1,45,000 tax exemption) on 3.8 lakhs salary: 61,285 before tax savings u/s 80C 30,385 after tax savings of 1 lakh u/s 80C --------- 30,900 is savings for Women/female after investing in 80C ======

N.J.Reddy

Lots of deductions available to you. If you contribute to insurance, if you have a home loan, if your kids go to school or colleges the tution fee paid id deductible. SO just visit a tax practitioner he may help you.

Abdul K

You can save tax through buying house through home loan or through LIC's etc.

Meera

better u take the ppf scheme or nsc certificates and lic policies for avoiding the tax.

d r

well u shd consult tax instructor.............

Priyanka M

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