5 Tax Saving Mistakes To Avoid – News18

Navigating the complexities of tax-saving methods requires diligence and consciousness of accessible deductions and exemptions. Making knowledgeable choices can considerably cut back tax liabilities and optimise monetary planning. By being conscious of those pitfalls, you may make sure you declare all of the deductions and advantages you’re entitled to, saving you invaluable rupees come tax season.

Taxpayers have entry to numerous provisions underneath the Income Tax Act, resembling Section 80C, which presents deductions for investments in avenues like PPF, ELSS, NSC, and EPF.

However, overlooking these avenues or failing to grasp their nuances can result in missed alternatives and better tax burdens. Therefore, taxpayers have to be effectively-knowledgeable and proactive in leveraging these tax-saving alternatives to their benefit.

Here are 5 frequent errors to keep away from that may considerably impression your tax-saving technique;

1. Being Unaware Of Deductions: Ignoring sections like 80C of the Income Tax Act, which presents a number of avenues for tax-saving investments resembling Public Provident Fund (PPF), Equity Linked Saving Schemes (ELSS), National Savings Certificate (NSC), and Employee Provident Fund (EPF). Failing to benefit from these deductions as much as the utmost allowable restrict (at the moment Rs 1.5 lakh every year) means lacking out on vital tax financial savings.
2. Not Utilising House Rent Allowance (HRA) Exemption: If you’re a salaried particular person receiving HRA as a part of your wage, you may declare an exemption on the hire paid, topic to sure situations. Failing to submit hire receipts or present correct documentation to your employer can lead to lacking out on this invaluable tax-saving alternative.
3. Neglecting Health Insurance Premiums: Premiums paid in direction of medical health insurance insurance policies for self, partner, kids, and oldsters are eligible for deduction underneath Section 80D. Not availing this deduction can lead to increased tax liabilities. Additionally, senior residents are eligible for increased deductions underneath this part.
4. Not Utilising NPS (National Pension System) Benefits: Contributions made to NPS are eligible for tax deduction underneath Section 80CCD(1B), over and above the restrict out there underneath Section 80C. Not availing of this extra deduction can lead to lacking out on tax financial savings and a invaluable retirement planning alternative.
5. Last-Minute Tax Planning: Procrastination is dear! Don’t wait until March to take a position for tax financial savings. Early planning permits you to unfold investments all year long and doubtlessly earn extra tax-free curiosity.

Disclaimer: The views and funding suggestions by specialists on this News18.com report are their very own and never these of the web site or its administration. Readers are suggested to test with licensed specialists earlier than making any funding choices.