TAX SAVING OPTIONS

10. TAX SAVING OPTIONS

Definition: Income tax is a percentage of your income paid to the government to fund its expenses.
Details: It is levied based on the Income Tax Act (IT Act), 1961, and subsequent Finance Acts.

Individuals: Every person, including those employed by the state or central governments.
Other Entities: Hindu Undivided Family (HUF), Association of Persons (AOP), Body of Individuals (BOI), corporate firms, companies, local authorities, and other artificial juridical persons.

Annual Cycle: The year starts on April 1st and ends on March 31st of the next calendar year.
Previous Year and Assessment Year: The year income is earned is the previous year, and the year it is charged to tax is the assessment year.

Section 80C: Deductions for investments in life insurance, provident fund, ELSS schemes, Special Bank Deposits, NPS account (Tier 1), National Savings Certificate, and principal repayment of housing loans.
Section 80CCD (1B): Additional deductions for investments in NPS, over and above Section 80C deductions.
Section 80D: Deductions for medical insurance for self, spouse, dependent parents, and dependent children.
Section 80G: Deductions for donations to charitable institutions and national importance institutions.
Section 80TTA: Deductions for interest earned on savings bank accounts, subject to limits and conditions.
Section 24: Deductions for interest paid on housing loans availed after April 1, 1999.

Last Date: July 31st of each financial year for individuals.
Important Note: Relevant dates and provisions are subject to change, and readers are advised to check the latest guidelines issued by the government.