5 tax-saving tips in 2022: Best financial advisor in Kolkata

Income tax becomes a vital obligation to ensure that a country’s government functions correctly and delivers the resources required by its population. As a result, paying income taxes should be regarded as a responsibility rather than a burden. Taxpayers must ensure that their forms are filed and that they are paying the correct amount of taxes each tax season. Keep in mind, however, that the Indian government has implemented a number of procedures that allow taxpayers to make their own investments and drastically lower their taxed income. You should be equally concerned about overpaying and underpaying your income tax as a taxpayer. As a result, you should constantly examine the composition and benefits of tax savings as part of your tax return filing method. To acquire a better knowledge of this topic, let us go deeper into the significance and 5 tax-saving tips in 2022.

Citizens of a country are expected to pay monthly taxes in order for government programs and operations to run successfully. On the other side, the Indian government has implemented a variety of policies that allow citizens to save significant amounts of money on taxes. This can only be accomplished by focusing on tax savings and making proper use of these laws. To acquire a better grasp of the topic, let us take a closer look at tax savings and analyze the many benefits of tax savings:

What does it mean to save money on taxes?

Deductions, exemptions, and allowances are examples of tax-saving features that a citizen might make use of to reduce his tax burden. To ensure that you are properly utilizing the tax provisions available to you, it is necessary to carefully manage your funds and assets ahead of time. Tax planning is the process of reducing your tax liability via careful financial and investment planning. It can be accomplished in a number of ways.

5 tax-saving tips in 2022

Here are 5 tax-saving tips in 2022 to help you maximize your savings.

1. Section 80C is the holy grail of tax planning.

This scheme allows you to deduct up to Rs.1.5 lakh from your taxable income. This deduction is available through investing in qualified choices such as life insurance, ELSS schemes, PPF, EPF, National Saving Certificate, Sukanya Samriddhi Yojana, SCSS, and others.

Increasing your insurance coverage can also help you take advantage of the 80C bonus. You can select between term insurance and a traditional endowment plan for this.

Additionally, tuition for your children, home loan repayments, property registration, and stamp duty are all possible deductions. As a result, ensure that you claim all of the qualified expenses and investments allowed under the provision and deduct Rs.1.5 lakhs from your taxable income.

2. Invest in a health-care policy.

Having health insurance coverage has become a necessity in this day and age when medical costs are growing. According to a Max Bupa poll, before COVID, just 10% of participants believed in the need for health insurance; after COVID, that figure jumped to 71%. A health insurance plan pays for your medical expenditures while also saving you money on taxes. You can deduct the premium you paid for the policy from your taxable income under Section 80D.

You can claim a deduction of up to Rs.25,000 if you are under the age of 60, and a deduction of up to Rs.50,000 if you are 60 or older. You can also claim an extra deduction of Rs.25,000 if your parents are under 60 years old, or Rs.50,000 if they are over 60 years old if you invest in a plan for them. As a result, you can deduct up to Rs.1 lakh from your income and save up to Rs.30,000 in taxes if you have a health plan (if you fall in the 30 percent bracket).

3. Invest in your own home.

According to a poll conducted by Home Credit, 67 percent of Indians are considering taking out a home loan. The loan not only helps you finance your dream home, but it also offers you the following tax benefits:

• The principal repayment of the loan can be claimed as a deduction up to Rs.1.5 lakhs under Section 80C.
• Interest paid up to Rs.2 lakhs is deductible under Section 24(b).
• If you invest in an affordable housing program with a stamp duty value of up to Rs.45 lakhs, you can claim an additional deduction of up to Rs.1.5 lakhs under Section 80EEA.
• To create a valuable asset while saving money on taxes.

4. Make plans for your retirement now.

Finally, retirement planning might assist you in reducing your tax liability. If you invest in the NPS system, you can deduct an additional Rs.50,000 under Section 80CCD (1B). As a result, the NPS scheme can help you create a retirement corpus while also delivering tax benefits, ensuring a financially secure retirement.

5. To get rid of your tax debt, use Section 87A.

According to CBDT estimates, 3.29 crore of the 5.78 crore tax returns filed in 2018-19 were for taxable income of less than Rs.5 lakh. These taxpayers took use of Section 87A to get rid of their tax debt.

Do you want to know how?

The wand of a sorcerer is Section 87A. You can claim a tax refund if your taxable income is less than Rs.5 lakhs. The rebate is equal to the lesser of Rs.12,500 or the actual tax payable. You can reduce your tax liability even if it exceeds Rs.5 lakhs by claiming tax credits under Sections 80C, 80D, 80CCD (1b), and other relevant sections. Then take advantage of the Section 87A rebate to avoid paying any taxes. 5 tax-saving tips in 2022 are simple as that!

Saving money on taxes isn’t rocket science. All you have to do is plan ahead of time with wise financial decisions and investments. Welfin’s professionals can offer experienced guidance and assist you in making tax-saving investments while also increasing your financial well-being through strategic tax planning. At the end of the day, the 5 tax-saving tips in 2022 differ from person to person. A legitimate term insurance plan, on the other hand, should always be considered a tax-saving option by every taxpayer.