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As the current financial year (FY 2022-23) draws to a close, taxpayers should take advantage of some tax deductions before the March 31st deadline. To save a significant amount of money, individuals should consider following these steps:
- Under section 80C, taxpayers can claim a deduction of up to Rs 1,50,000 by investing in ELSS, PPF, NPS, EPF, tax-saving fixed deposits, and other instruments.
- Investing in the National Pension Scheme (NPS) can also help individuals save tax as they can claim an additional deduction of Rs 50,000 in addition to the overall limit of Rs 1.5 lakhs under section 80C.
- Taxpayers can also avail of a deduction of up to Rs 25,000 for their health insurance premiums. In addition to this, seniors can claim up to Rs. 50,000 for both categories.
- Purchasing an electric vehicle can also entitle taxpayers to a deduction of up to Rs 1,50,000 for the interest paid on the loan.
- Home loan tax benefits can be availed under various sections of the Income Tax Act, up to Rs. 1,50,000 under section 80C, up to Rs 2,00,000 under section 24B, up to Rs 50,000 under section 80 EE, and up to Rs 1,50,000 under section 80 EEA.
- Lastly, if the tax liability, net of TDS, exceeds Rs 10,000, taxpayers should pay the advance tax to avoid an interest penalty.
