The deadline for submitting taxes is approaching. Beginning in April, the procedure of submitting income taxes will also begin. Prior to April, there is something crucial to accomplish. Working on this project may result in tax savings. Finance Minister Nirmala Sitharaman recently raised the tax slab under the new tax system while presenting the Budget 2023. Up to an annual income of Rs. 7 lakhs, according to the new amendment, no tax will need to be recorded when using the new tax system. Yet, under the previous tax system, this ceiling was not raised.
Income Tax
A person was required to pay tax on taxable income under the previous tax system if they filed a tax return. In addition, under this tax system, a rebate of up to Rs 1.5 lakh can be received in a financial year under Section 80C of the Income Tax Act. If you must file taxes under the old system in such a case, you can save money on taxes by working throughout the month of March itself. This will allow you to save money on taxes for the current fiscal year.
Tax Savings
In accordance with the Old Tax Regime, 5% of annual income between Rs 2.5 lakh and Rs 5 lakh is subject to tax, with a refund also possible. In this case, taxation begins on income over Rs 5 lakh. A person can put money in a tax-saving plan if they file their taxes under the Old Regime and their income is greater than 5 lakh rupees.
Tax Saving Strategy
Public Provident Fund, or PPF, may be employed as part of a tax-saving strategy. Under this, investments can be made for as little as Rs. 500 or as much as Rs. 1.5 lakh per fiscal year. This scheme has a 15-year maturity period concurrently. Currently, this arrangement pays out 7.1 percent interest yearly on a compounding basis. Also, this strategy allows for tax savings on both the received and the invested amounts.
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