Earnings Tax Saving: Type-16 has been issued by the businesses. The final date for submitting ITR has been mounted by the Earnings Tax Division as July 31. In such a state of affairs, if you’re additionally considering of paying tax on revenue of 10 lakh rupees, then you’re unsuitable.
In case your wage bundle is 10 lakh rupees and also you pay a big a part of your earnings within the type of tax, then watch out. Maybe you'd suppose that there isn't any strategy to save tax, in such a state of affairs, whether it is proper to pay tax, then you're unsuitable. Not solely this, even when your wage bundle is 10.5 lakh rupees, even then you'll not must pay 1 rupee as tax. Let’s know the whole maths…
On a wage of 10.5 lakhs, you fall within the slab of 30 p.c tax. As a result of 30 p.c revenue tax is liable on annual revenue above 10 lakhs.
That is the whole maths
1. In case your wage is 10.5 lakh rupees, then to start with subtract 50 thousand given by the federal government as commonplace deduction. On this approach your taxable revenue is now Rs 10 lakh.
2. Now you'll be able to declare Rs 1.5 lakh beneath 80C. On this, you'll be able to declare kids’s tuition price, PPF, LIC, EPF, Mutual Fund (ELSS), principal of residence mortgage and many others. On this approach, your taxable revenue right here has been decreased to Rs 8.5 lakh.
3. It's important to make investments 50 thousand beneath Nationwide Pension System (NPS) beneath 80CCD(1B) to make tax zero (0) on wage of 10.5 lakhs. On this approach your taxable wage has come all the way down to Rs 8 lakh.
4. Now beneath Part 24B of Earnings Tax, you'll be able to declare tax exemption on residence mortgage curiosity of Rs 2 lakh. On this approach, now your taxable revenue has come all the way down to Rs 6 lakh.
5. Underneath Part 80D of Earnings Tax, you'll be able to declare a premium of 25 thousand rupees medical medical insurance for your loved ones (spouse and kids). Aside from this, senior residents can declare 50 thousand for medical insurance premium paid for folks. After claiming whole medical insurance premium of 75 thousand, your taxable revenue has come down to five.25 lakhs.
6. Now you need to donate 25 thousand rupees to any group or belief to carry your taxable revenue to five lakhs. You'll be able to declare it beneath Part 80G of Earnings Tax. On donating 25 thousand, your taxable revenue got here all the way down to Rs 5 lakh.
You'll have to pay zero tax
, now your taxable revenue has been decreased to Rs 5 lakh. On the revenue of two.5 to five lakh rupees, on the charge of 5 p.c, your tax turns into Rs 12,500. However there may be an exemption from the federal government on this. On this case your tax legal responsibility turns into zero.