Plan Income Tax Return: 3 Lesser Known Ways to Save Income Tax

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Tax Saving is a continuous process but not everyone plans it well through the year. It often ends up being a last-minute rush whereas online income tax return filing is annual process. This financial year is nearing its end and if you haven’t been planning your taxes all through the year, you must be busy looking for last-minute options to save your hard-earned money this time around.

If you have already reached out to the more popular investment options, let’s look at some of the lesser-known investment options that can help you reduce your tax burden except the basic exemption limits mentioned in income tax slab by online income tax return filing on or before the ITR due date.

3 lesser known ways to save tax for online income tax return filing other than specified deductions and the basic exemption limits mentioned in income tax slab are as follows:

Withdraw And Reinvest Old Tax-Saving Investments:

Sometimes, there’s no need for you to invest more money. You can use money received from old tax saving investments which have completed the lock-in period and re-invest them further for tax benefits.

Pre-School Fee Deduction Under Section 80C:

Tuition fees for pre-school (pre-nursery and nursery) are eligible for deduction under Section 80C. However the benefits are restricted to two children and each parent can claim for deduction on the fees for two children.

Saving Tax With The Help Of Parents:

Gift Money To Parents And Then Invest:

If you gift money to your parents or in laws, any income earned from investment of such money would be taxed as per the parents’ applicable tax slabs.

Pay Rent To Parents:

-You can claim exemption for HRA under Section 10(13A) and your parents will be eligible for standard deduction and deduction on municipal taxes paid, resulting in savings for the entire family. But you do need to have a proper rent agreement and rent slips from your parents.

-You can also claim deduction under Section 80GG for rent even if you are not eligible for HRA.

Pay Interest To Parents:

You can claim deduction under section 24B for interest on loan taken from parents to finance house purchase. But take proper interest certificate from your parents as proof of interest payment.

Premium Payment For Senior Citizen Parents:

 You can claim deduction under Section 80 (D) of up to ₹ 25,000 for premium payment for yourself in a financial year. And you can claim an additional deduction of ₹ 50,000 on premium payment for your senior citizen parents. If a senior citizen pays for the premium of his very senior parents, he/she can claim for an additional deduction of ₹ 50,000.

Also, if you are paying for the expenses on medicines for your senior citizen parents, you can avail deduction up to ₹ 50,000 under Section 80 (D). However, do keep a record of all the bills and prescriptions safely for submitting proof.

So, the above mentioned ways are lesser known to save tax, you can avail the benefits and can save your tax while online income tax return filing on or before the ITR due date in accordance to the applicable income tax slab. To understand in detail you can also consult professionals like CA, CS, tax consultant etc. as they have complete information about the the exemption limits, deductions, income tax slab, ITR due date, balance sheet, etc. To find authentic & verified professionals for online income tax return filing you can take help of CAONWEB online CA directory.