Tax-Saving Tips: Keep these 6 points in mind before filing your income tax return; you could save a lot of money..

Tax Saving Tips: The deadline for filing Income Tax Returns (ITR) is fast approaching. If you haven't filed your ITR yet, very little time remains. The Income Tax Department has not yet decided to extend the July 31 deadline. CA Amit Kumar, who has worked as an ACFO for a major industrial group in Gurugram, noted that while the deadline has been extended in previous years, it is prudent for taxpayers to file their ITR before July 31. He also discussed ways for taxpayers to save on taxes, specifically highlighting provisions for claiming six types of deductions.

How those under the Old Tax Regime can save tax
CA Amit Kumar explained that the Old Tax Regime offers significant benefits through Section 80C and the National Pension System (NPS). Under Section 80C, a deduction of up to ₹1.5 lakh can be claimed for investments in PPF, EPF, and tuition fees. Additionally, an extra deduction of ₹50,000 can be claimed through NPS under Section 80CCD(1B), allowing for a total deduction of up to ₹2 lakh.

He also discussed tax exemptions related to health, education, and home loan interest. He noted that under Section 80D, a deduction of up to ₹1 lakh can be claimed for health insurance, while Section 80E allows for an uncapped deduction on interest paid on education loans. Meanwhile, Section 24(B) offers a benefit of up to ₹2 lakh on home loan interest payments.

Amit Kumar also spoke about tax exemptions on donations. He explained that under Section 80G, taxpayers have the option to claim a tax deduction ranging from 50% to 100% on donations made to recognized institutions. With the right information, taxpayers can achieve significant tax savings. 6 Things Taxpayers Should Keep in Mind
If you have made payments towards the Public Provident Fund (PPF), Employees' Provident Fund (EPF), tax-saving fixed deposits, ELSS, National Savings Certificate (NSC), Sukanya Samriddhi Yojana, life insurance premiums, children's tuition fees, or the principal amount of a home loan, you can claim a tax deduction of up to ₹1.5 lakh under Section 80C. This is the most widely used provision for tax saving.

Additionally, if you have invested in the National Pension System (NPS), you can avail an additional tax deduction of up to ₹50,000 under Section 80CCD(1B). This deduction is separate from the one under Section 80C; effectively, a total tax saving of up to ₹2 lakh is possible by combining the benefits of Section 80C and Section 80CCD(1B).

If you have purchased a health insurance policy for yourself, your spouse, children, or parents, you can avail a tax deduction under Section 80D. Depending on family status and the inclusion of senior citizens, this deduction can range from ₹25,000 to ₹1 lakh. However, the premium must be paid through banking channels.

Furthermore, an education loan taken for higher studies also helps in saving tax. Under Section 80E, a tax deduction is available on the entire amount of interest paid on the education loan for a specified period. There is no upper limit prescribed for this deduction. However, the deduction applies only to the interest component, not the principal amount of the loan.

Finally, if you have made donations to a government-recognized institution, trust, or relief fund, you can claim a tax deduction of 50% or 100% under Section 80G, depending on the specific institution to which the donation was made. To claim the deduction, it is essential to preserve the donation receipt and the registration details of the concerned institution. Additionally, if you have taken a home loan to purchase a house, you can avail a tax exemption of up to ₹2 lakh on the interest paid under Section 24(b). Note that this exemption applies only to the interest component, whereas the principal amount of the home loan is claimed under Section 80C.

**Reconciliation of Form 16, AIS, and Form 26AS is essential**
Before filing your return, ensure you reconcile Form 16, the Annual Information Statement (AIS), and Form 26AS to avoid any discrepancies regarding your income and tax deduction details. Keep all documents and receipts related to the deductions you intend to claim handy. Also, choose the appropriate tax regime based on your income and investments. Ensure that details regarding your bank account, PAN, Aadhaar, and other personal information are entered correctly. Most importantly, complete the e-verification process after filing your ITR, as the return filing process may be considered incomplete without it.

CA Amit Kumar stated that filing an Income Tax Return is not merely a legal formality but also an integral part of effective tax planning. By properly leveraging available tax deductions and reconciling all necessary documents before filing your return, you can not only avoid paying excess tax but also steer clear of future tax-related complications.

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