Every individual of the country has to pay Income tax mandatorily as prescribed by the government. There are certain ways you can save tax each year. This tax amount is used by the government for various developmental programs of the country; part of this tax money is also used for the development of the society and upbringing of the poor.
The assessment of Income tax takes place in the month of March every year. The tax is to be paid by every person who earns profit – it can be in the form of salary, profits from business from either public limited or private limited company. The income tax is calculated on the annual profit made by the individual or the company. There has been introduction of the new pay commission in the year 2010. All the employees have benefitted from the pay commission; the salaries have increased and at the same time the tax amount shall also increase relatively.
Save Tax in India 2012
There are many tax saving options in India. There are many banks and financial institutions who give details about various tax saving schemes to the individuals and the companies. Some of the most well known tax saving schemes is mutual funds, savings bonds and insurance etc. There are various powerful tools which can help the person save tax to a large extent. The Reserve bank of India has introduced bonds of 3 years and 5 years which gives an interest of 7.5% per annum. These bonds are available in two types cumulative and non cumulative.
In India the tax slabs for male and female are different according to the annual income. If the earnings of the male is between 1,60,000 – 5,00,000 then the tax deducted would be 10% of the annual income. In case it is more than 5,00,000 then the tax shall be deducted at the rate of 20%. In case the income is more than 8,00,000 the rate of tax would be 30%. In case of females the tax is deducted at the rate of 10% only if the income is more than 1,90,000. The following tax saving options in India will help the tax payer in saving the taxes to a large extent.
- Mutual Funds – One of the tax saving options in India is the mutual funds. There are many mutual funds schemes available in the market – both private and government. Some of the mutual funds are State Bank of India mutual funds, Franklin Templeton, Kotak Mahindra, HDFC, ICICI etc. The tax payer should take care to take only those mutual funds which have a locking period. Those mutual funds which are without a locking period cannot get a income tax benefit.
- Home Loan – If the tax payer has taken a home loan then he/she can get the benefit on the EMI of the loan paid. The EMI should be paid before the tax assessment is done so as to avail the benefit.
- House rent – The House rent allowance also gets a waiver in the income tax assessment. The rent receipt of the rent paid has to be submitted as proof to the income tax.
- Insurance policies – The tax payer can get a rebate on the life insurance and healthcare insurance policies. There is no benefit of tax available for general insurance.