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Here's how you can save on your income tax

Here's how you can save on your income tax

Here's how you can save on your income tax
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By CNBC-TV18 Feb 28, 2019 1:05:37 PM IST (Published)

We can opt for a refund and claim reductions in the taxable income if we have invested in government-backed funds or institutions such as LIC, PPF, Mediclaim, among others.

It's that time of the month, again, when you are eagerly waiting for phones to beep with the text notifying that the salary has been transferred to your account. Most of us are grateful that February is a short month (yes, two-three extra days in the other months can some times be very painful for our wallets).

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Sometimes, most of us get frustrated because the salary we get is lesser than the salary we were promised. The salary amount is lesser because of the taxes we are obliged to pay.
However, we can save on our taxes. The Human Resources (HR) team of our companies keep asking us to fill in our investments, etc so that we can get refunds from the income tax we pay.
In a way, we are getting more money in our accounts and of course, who would say no to that?
So what investments do we do saving from the income tax we pay?
We can opt for a refund and claim reductions in their taxable income if we have invested in government-backed funds or institutions such as LIC, PPF, Mediclaim, among others.
Options under this are PPF, Pension Funds, Senior Citizen Savings Scheme, Life Insurance, Fixed Deposits,  Post Office Time Deposit Scheme and National Saving Certificate (NSC).
If mutual funds lure you, you should opt for ELSS funds from mutual funds scheme that come under Section 80C and limit your investment to only Rs 1.5 lakh per financial year in such a fund so that you are able to reap benefits.
Also, if you have taken a home loan then you can claim a reduction of up to Rs 50,000 on the interest you have to pay against the loan, as per Section 80E.
Home loans can also help you in reducing taxable income as the principal portion of home loan can be claimed under Section 80C upto Rs 1.5 lakhs  and the interest portion can be claimed as a deduction from income from house property.
To get the refund, we have to furnish these documents to our HR and then claim our refund. In no time, we will get a message again, with more funds from the company. And who can so no to that, right?
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