Hi Folks,
Hey there, fellow earner! We got an amazing tax trick to share with you, just like magic!
First, remember the rules: how much tax you pay depends on your total income after some allowed deductions.
Also, don't forget to include any other income you have, like bank interest or rent money, when calculating taxes.
We know inflation and living costs can be tough, but you can handle it!
Here's the real magic: use the tax rules wisely. Take advantage of deductions and exemptions provided by the Income Tax Act.
Abracadabra! With a snap of your fingers, watch your tax rate go down to ZERO! Yes, no taxes to pay!
It's like being a tax wizard, escaping the taxman's grasp and keeping more money in your pocket.
So, seize this opportunity, work your magic, and enjoy a tax-free life. Show off your new trick to friends and celebrate your financial freedom!
And here are some tax deductions available under the old regime:
Tax Deductions Available as per Old Regime:
1. Standard deduction of Rs. 50,000 under section 16(ia) of IT Act.
2. Deduction under section 80C of IT Act of upto Rs. 1,50,000 towards payments made to Life Insurance Premium, Provident Fund, National Savings Certificate, Housing Loan Principal, etc.
3. Deduction under section 80CCD (1B) of IT Act of Rs. 50,000 on contribution to National Pension Scheme notified by Central Government
4. Deduction under section 80D of the IT Act of Rs. 25,000 (Rs. 50,000 in case of senior citizen) towards payments made to Health Insurance Premium.
5. Deduction under section 24(b) of the IT Act with regards to interest on housing loan upto Rs. 2,00,000 pa whereas the repayment of the principal component of the loan could be claimed as deduction u/s 80C as aforementioned.
6. The maximum deduction allowed under Section 80TTA is Rs. 10,000. In case your savings bank interest income is less than Rs. 10,000, the entire interest income will be your deduction. If your interest income is more than Rs.10,000, your deduction will be limited to Rs. 10,000.
Below Illustration may help :
| Particulars | Amount (Rs.) | Amount (Rs.) |
| Income under the Head ‘Salary’ | ||
| Gross Salary | 1000000 | |
| Less: Standard Deduction u/s 16(ia) | -50000 | 950000 |
| Income from House Property | ||
| Interest Paid/ Payable on Housing loan (assuming on Self occupied property) | -200000 | -200000 |
| Income from other Heads is assumed to be NIL | - | - |
| Gross Total Income | 750000 | |
| Less: Deductions under Chapter VI-A | ||
| Deduction u/s 80C | ||
| LIC premium | 40,000 | |
| Contribution to Public Provident Fund | 70,000 | |
| Tuition Fees of children | 5,000 | |
| Repayment of Housing Loan | 50,000 | |
| Deduction u/s would be restricted to maximum Rs. 1,50,000 | (1,65,000) | (1,50,000) |
| Deduction u/s 80CCD(1B) Contribution to National Pension Scheme | -50000 | -50000 |
| Deduction u/s 80D Mediclaim premium paid for | ||
| Self and Spouse | 25000 | |
| Parents (aged 50 years and above) | 25000 | -50000 |
| Net Taxable Income | 500000 | |
| Total Tax @ applicable marginal slab rate of 5% | 12500 | |
| Rebate u/s 87A (Tax payable or Rs. 12,500 whichever is lower) | -12500 | |
| Total Tax Payable | NIL |
Thanks for reading !! Do Share if this was helpful and do leave your comments.
Regards,
Author
