If you are a salaried individual earning between Rs 5 lakh and Rs 15 lakh net salary on an annual basis, then you must first know about your existing tax liability. Once you ascertain the amount of tax that you have to pay, you must plan to save tax by availing tax deductions under the relevant provisions of the Income Tax Act. For optimum tax savings, you can choose to invest in tax saving options, make voluntary donations, take a home loan or ask your employer to restructure your salary. You must always remember to plan early for tax savings, preferably at the beginning of the financial year, to prevent any stress or hassle while filling your annual Income Tax Return (ITR).
Understanding income tax slabs: The income tax department ascertains your tax liability on the basis of your annual income. As per the tax slabs, an individual below 60 years is categorised under the tax slab of 5% for an annual income between Rs 2.5 lakh and 5 lakh. The tax slab of 20% is applicable for an annual income between Rs 5 lakh and Rs 10 lakh, while the 30% tax slab is applicable for those individuals earning above Rs 10 lakh. You must also remember that an additional 4% health and education cess is also payable. The government provides a full tax rebate for individuals earning up to Rs 5 lakh. From the financial year 2020, the government has provided for a new tax slab for individuals willing to forego certain deductions and tax exemptions.
Best tax saving methods: Read on to know more about the best methods to save taxes:
Click here to use - Income Tax Calculator
Conclusion: You can avail tax savings through various methods, including investment in Unit Linked Investment Products (ULIPs). ULIPs provide the dual benefits of investment and protection through high, market-linked returns and life insurance. You can zero in on the Invest 4G plan from Canara HSBC Oriental Bank of Commerce Life Insurance. This is a protection and savings oriented Unit Linked Insurance Plan allowing tax savings on making premium payments as well as on maturity benefits.
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