Income Tax Season: 5 best tax saving tips for salaried employees

5 Best Tax Savings for Salaried Employees: The last date for filing ITR for the financial year 2023-2024 is July 31, 2024. According to the income tax slab, if a person have chosen the old tax regime, he/she will not have to pay any tax on income up to Rs 5 lakh. While in the new tax regime, there is no tax on income up to Rs 7 lakh. 

Be it a salaried person or a businessman, everyone is trying to save income tax by trying their own methods. For working people, tax saving is always a challenge. They need to plan their monthly expenses along with savings, investments, and retirement. Understanding this need, here are five methods to help you save on income tax easily.

1. Home Loans

If you have taken a home loan, you can get a tax exemption on its principal amount under Section 80C. Additionally, you can get an exemption on the interest of the home loan under Section 24(b) of the Income Tax Act. Tax exemption can be claimed on interest up to Rs 2 lakh if the property is self-occupied.

2. Employee Provident Fund (EPF)

One of the simplest options for salaried people to save tax is the Employee Provident Fund (EPF). It provides a tax exemption of up to Rs 1.5 lakh under Section 80C of the Income Tax Act. Interest up to Rs 2.5 lakh annually received in the PF account is tax-free.

3. House Rent Allowance (HRA)

House Rent Allowance (HRA) is an allowance given to employees to pay their house rent. Tax exemption on HRA can be availed under Section 10(13A) of the Income Tax Act, subject to certain limits:
- Up to 50% of basic salary for those living in metro cities, and up to 40% for those in smaller cities.
- 10% of total annual income on paying house rent.
The lowest amount calculated from these criteria can be used for HRA tax exemption. To qualify, you must live in a rented house and provide a tenancy agreement or house rent receipt.

4. Health Insurance Policy

Under Section 80D of the Income Tax Act, if you pay the premium for health insurance, you get a tax exemption. If you have a health insurance policy for yourself, your spouse, children, and parents, you can claim a tax deduction on premiums up to Rs 25,000. If your parents are senior citizens, the tax exemption limit increases to Rs 50,000.

5. Tuition Fees

You can get a tax exemption on the tuition fee portion of school/college fees for your children's education. Under clause 17 of Section 80C of the Income Tax Act, a provision allows parents paying tuition or school fees to claim tax exemption. This can be availed for the tuition fees of up to two children. To get this exemption, you need to submit the admission certificate and fee receipts from the institution.