Are you stressed over how much tax you are paying? Have you ever thought over the possibilities of how you can save tax? Paying taxes is very important for the growth and development of your country. However, it can sometimes cause a serious blow on our pockets if we have to pay the entire taxable amount on our incomes. Not paying taxes is also not an option because this is a punishable offense. In such a scenario, we always tend to look up for ways to save on our taxes. The income tax department of several countries allows for certain deductions that can be made while filing income tax returns. Any tax payer be it professionals, salaried individuals, businessman can benefit from these rebates. These reductions are beneficial for tax payers only if they plan their taxes throughout the year. Only then they can save their tax.
If the tax payer has done proper tax planning to save tax, such deductions would be subtracted from the gross total income and income tax would be applicable on the balance income as per the income tax slabs in force. Here are some effective ways to save tax.
We often spend a considerable amount of income to provide the best possible education to our kids. Here is the good news. Income tax laws provide an opportunity to compensate the expenses made on the tuition fees by reducing the taxes.
Repayment of home loan.
Here is a big relief for all of you going through the burden of paying EMIs of home loans. These loans are beneficial on both principal and interest component of instalments. Greater amounts of tax can be saved if you are paying for your first house.
Medical Insurance and Health Check-ups.
If you are spending any money on Medicare policies or Medicare Supplement Plans 2018 and preventive health check-ups, tax laws let you make some tax benefits from these. Just make sure you are not paying for the premiums in cash.
Ironically, the day you start earning is the day you start planning for your retirement. You can reduce taxes when you contribute to certain pension funds.
Medical Expenses of Disabled Individuals.
A person suffering from a disability himself gets tax benefits. Apart from this, if you have a dependent member in your family who is suffering from any disability, then you avail tax benefits. These deductions offered by the tax laws are very important. You can avail this deduction to take care of the disabled member of the family. It can help you save a considerable amount from your taxable income. Here is an opportunity to save a lot of your hard earned income and achieving ultimate financial goals of the year. Plan your tax carefully. By choosing any of the above –mentioned options as per ones suitability, a person can save a lot of money. It is always good to pay your taxes on time but not overpay your taxes.