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Tuesday, 29 March 2011

How To Save Income Tax In India?

As per the government law, it is mandatory for every citizen to pay the income tax. Tax assessment takes place every year in the month of March. Government has given so many benefits to the taxpayers. Tax payment is applicable for a person who is generating profit by any mode either by the business or from the job. In any of the public or private limited company, there are shareholders then the tax will not be exempted on the individual basis. The calculation is based on the annual profit generated by the organization.

In India, there are various tax slabs for the male and female and as per the annual salary, the tax deduction takes place. If a male individual earns (in Rs) 160,001 to 500,000, the tax would be 10% if it exceeds from 500,000 to 800,000 the tax would be 20% if it exceeds from 800,000 the tax would be 30%. Tax slabs for the female individual is different from the male individual, the tax limit for the female start from 190,001. For 190,001 the tax is 10%, from 500,000 to 800,000 tax is 20% whereas for above 800,000 tax would be 30%.

To get the tax benefit, it is important to show the investment proof. Tax waiver is applicable if the investment has done in the following:

Mutual funds – There are several government and private mutual funds available in the market such as State Bank of India mutual funds, Franklin Templeton, Kotak Mahindra and ICICI. Investor has to take care that tax waiver is available only on those mutual funds that have a locking period; a fund without a locking period is not eligible for the income tax benefit.

Home Loan – If an individual has purchased any property on loan, a tax waiver is applicable on it.

House Rent – House rent is another mode to save the income tax. While filing for income tax, tax receipt should be attached.

Insurance Policy- Government has given tax benefit on different type of insurance policies such as life insurance policy and health Care. This should be noted that no tax benefit is given for the General insurance like motor insurance etc.

While filing for the income tax it is useful to attach the receipt of the documents as per the above list.


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