Maximize Your Tax Savings with Essential Tips in FY 2023-24

As the end of the financial year 2023-24 is coming in a few months, individuals and businesses have to create a plan to save income tax. Paying taxes is a duty of every citizen, so individuals who are below the age of 60 years and whose gross income is more than Rs. 3 lakh have to file an ITR every year.  

For senior citizens (people between the age of 60 to 80 years) the minimum gross income limit is Rs. 3 lakh. For super senior citizens (people aged above 80 years) limit is Rs. 5 lakhs.

5 Tips to Save Income Tax for the FY 2023-24. 

1. Investment Under Section 80C 

The individuals and HUFs can claim a deduction under section 80C for a maximum deduction of Rs. 1.5 lakh every year from the total tax income. The companies, partnership firms, and LLPs cannot avail of the benefits of the deduction. The individuals and HUFs can invest their money in the following schemes that are eligible to get tax deductions:  

2. Get a Health Insurance Policy (Section 80D) 

Medical expenses are one of the major expenses and most of the time people don’t buy health insurance at a young age because of lower health issues. To encourage people to monitor their health, the government is providing a tax deduction of up to Rs. 5,000 in every financial year for health checkups. However, this deduction is included in the overall Section 80D limit of Rs. 25,000 for individuals and Rs. 50,000 for senior citizens. In the cover you, your spouse, your children, and your parents, all are included. 

3. Home Loan Interest (Section 24) 

Homeowners who have a home loan can claim a deduction under Section 24 of the Income Tax Act. A maximum deduction is Rs. 2 lakhs (and 1.5 lakhs if you are filing the return for the last financial year of the loan). The individual who is residing on the house property can take advantage of this deduction. In case the house is on rent, then the entire interest is waived off as a deduction. 

4. Standard Deduction 

A standard deduction is available as a deduction to the employee from the total salary. The jobs changed are not affected by this. For the financial year 2023-24, a deduction of Rs. 50,000 or the amount of the salary whichever is lower is provided. Entertainment allowance is actual or at the rate of 1/5th of salary, whichever is less, and it is limited to Rs. 5,000 is allowed. 

5.  Donations (Section 80G and 80GGA) 

Contributing donations to certain approved funds, trusts, charitable institutions/ donations for renovation or repairs of notified temples, etc. The amount of deduction is 50% of the net qualifying amount and 100% qualifying donations to a Government scheme. Also, certain donations that are contributed for social, scientific, and statistical research or rural development programs are eligible for deduction. Including any scheme or National Urban Poverty Education Fund. 

Conclusion 

To conclude, having different tips to save income tax is an important step for every taxpayer. So, by analyzing the different sections of the Income Tax Act, you will see that the government provides ways for the taxpayer to save money and invest it. By following these options, you will reduce your liabilities and move your money into savings.  

However, you can also consult a professional for more tax-saving options in 2023-24. To read more about Income tax dates, the filing process, saving tax ideas, and others, check RegistrationKraft for short and easy-to-understand content.