Tips For Reducing Income Taxes: 5 Strategies You Should Be Aware Of

Everyone who falls into a tax band is required to file an Income Tax Return (ITR) during the current filing season. Nevertheless, a lot of people are ignorant of tax saving strategies, and as a result, they wind up paying more in taxes than they could have avoided with better tax saving advice.

Here are five tax-saving suggestions

Exemption from taxes on pre-nursery fees

You can still receive tax exemption on your child’s tuition even if he is enrolled in play school, pre-nursery, or nursery despite his small size. Despite being introduced in 2015, this tax benefit did not gain the same level of popularity as the deduction for school tuition. Section 80C allows you to receive this exemption, and you may receive it for a maximum of two children.

Show parents that you care

You can borrow money from your parents to pay for household expenditures, but you will have to pay interest if they are not yet taxed or are in a low tax category. But remember to obtain an attested document of interest payment in order to qualify for tax exemption. You will not be eligible for tax exemption if you are unable to produce this documentation. This tax exemption is available to you under Income Tax Section 24B. The maximum discount available under this is Rs 2 lakh.

Give Your Parents Their Rent Money

You may request HRA by paying your parents’ rent if you live with them and aren’t eligible to get HRA. By proving that your parents are your landlords, you may receive a tax deduction on HRA under Section 10(13A) of the Income Tax Act. You cannot, however, claim HRA if you are receiving any other housing benefit.

Purchase Health Insurance For Your Spouse and Kids

You may look for your parent’s health and save money on taxes at the same time. You are free from paying taxes on the premium amount if you enroll your parents in health insurance. For parents under 65, you would receive a tax exemption on premiums up to Rs 25,000 for health insurance. You would be eligible for a tax exemption of up to Rs 50,000 if they are over 65.

Tax exemption for medical costs incurred by parents

Additionally, you are eligible for a tax exemption on your parents’ medical costs. But, in order to do this, your parents must be at least 60 years old. They frequently have to pay high medical costs at this age, which are exempt from taxes under Section 80D. This allows you to receive tax exemption up to Rs 50,000.