It is important for every woman to be financially independent and pursue their goals. In order to maximize savings and investments, it is important for a woman to know the different ways in which she can avail of several tax benefits. If you are not opting for the new income tax slab, with the existing tax slab, there are several deductions you can claim to save taxes.
Here are some ways salaried women can save on taxes:
- Reduce your taxes with a house rent allowance
If you stay in a rented house, being a salaried individual, you can claim deductions on the house rent allowance. The tax benefits one can claim through their house rent depend on the basic salary and HRA amount. These are fixed by your employer and are mentioned in your pay slip. If the company you work in does not give you HRA or you are self-employed, you are still eligible to claim a house rent allowance. When you are filing your taxes, you need to mention the rent claim and you can easily avail of its deduction.
- Claims on purchase of health insurance
A good health insurance policy ensures that any costs regarding your health are protected, and your taxes are saved alongside too. A deduction of up to Rs 25,000 can be claimed per year on the premiums you pay for your health insurance. You can further claim deductions on premiums you pay for your spouse, senior citizen parents, or your dependent children, according to Section 80D of the IT Act. Use an income tax calculator to get the estimate on your salary deductions.
- Save taxes by investing in your education
You can get tax benefits if you have taken an education loan for higher studies, be it or yourself, your spouse, your child, or any other individual for whom you are the local guardian. According to the Income Tax Act of Section 80E, you can claim deductions on the interest you pay for the education loan. The dedication can be paid up to 8 years or until the interest amount has been paid fully, whichever is lower. Also, there is no cap or upper limit on the amount of claim one can get as a deduction.
- Get deductions while repaying your home loan
If you have a home loan, you can claim tax deductions on both the principal and interest components of it. You can also claim a deduction if you have taken a joint home loan on the amount you are paying. You can get a deduction of up to Rs 1.5 lakh on the principal amount of the home loan, according to Section 80C of the Income Tax (IT) Act. Also, you can claim deductions of up to Rs 2 lakh on the interest amount paid under Section 24 of the IT Act. If you are a first-time homebuyer, you can make the most of home loan tax benefits by additionally claiming up to Rs 50,000 towards the interest paidadditionally under Section 80EEE of the IT Act.
- Get tax benefits on interest in a savings account
You are eligible for a deduction of up to Rs 10,000 on the interest you have earned from your savings account. The tax deduction is eligible under Section 80TTA of the IT Act by simply mentioning the interest earned from savings deposits. An income tax calculator is an effective tool to get an estimate of the amount you would want to invest for exemptions.
- Save taxes with Sukanya Samriddhi Yojana
You can invest in the Sukanya Samriddhi Yojana if you have a daughter who is below 10 years of age. The scheme has an exempt-exempt-exempt (EEE) status where any contributions made towards the scheme are eligible for deductions and the maturity amount is also tax-free. You can invest a minimum of Rs 1,000 and a maximum of Rs 1.5 lakh under this scheme. The account matures when your daughter will turn 21 years old. You can avail of partial withdrawals of up to 50% when she turns 18 years old.
- Deductions on charity and relief funds
The amount you pay to charities and relief funds, can be claimed(50% or 100% of the amount paid as tax deductions). If you have donated to charitable trusts recognized by the government, you can easily claim deductions with no limits. Under Section 80G of the IT Act, you can claim donations you make using cheques and demand drafts. A cash donation of up to Rs 2,000 can be availed of this deduction as well.
These deductions are applicable only if you apply for the old tax regime, also known as the previous tax regime. If you are choosing the new income tax slab, there is a direct tax rate that is applicable based on the tax slabs. Also, while filing the taxes, it is important that you choose the correct Income Tax Return (ITR) form from the different types of ITRs.