Slash Your Tax Liability By Rs 1 Lakh: The Secret To Unlocking A Bigger Salary!

Are you tired of seeing a significant portion of your salary going towards taxes? With the ever-increasing tax rates and deduction limits, it can be challenging to save money from your income. However, there is some good news for you! By optimising your income and investments, you can reduce your tax liability by up to Rs 1 lakh.

Sudhir Kaushik of TaxSpanner.com shares valuable insights on how to rejig your income and investments to make the most of your money. According to Sudhir, one of the most effective ways to reduce tax liability is by using the New Pension Scheme (NPS) and salary perks.

NPS is a defined contribution pension scheme that allows individuals to invest a portion of their salary in a pension fund. The deposited amount can be claimed as a deduction under Section 80C of the Income-tax Act, which provides tax benefits up to Rs 1.5 lakhs. Additionally, an exemption of up to Rs 4 lakhs can be availed under Section 10(12A) of the Act.

Another way to reduce tax liability is by using salary perks such as Leave Travel Allowance (LTA), House Rent Allowance (HRA), and Health Insurance Premium. These perks can help reduce taxable income, thereby decreasing the tax liability.

For instance, if you are paying a rent of Rs 30,000 per month, you can claim an exemption of Rs 2.4 lakhs under HRA. Similarly, if you are paying a health insurance premium of Rs 20,000 per year, you can claim a deduction of up to Rs 25,000 under Section 80D of the Act.

By making use of these tax-saving options, individuals can significantly reduce their tax liability and increase their take-home salary. As Sudhir points out, even a saving of Rs 1 lakh can make a significant difference in your financial planning and can be used to achieve your long-term goals.