How Tax planning can be Done for Salaried Individuals?

Tax Planning is a key aspect of every salaried individual who earns more than 2,50,000 per annum. Every Individual remains in tension at the end of every financial year looking at the amount that they have to shell out from their kitty. Therefore, it is always suggested that it should be done in a careful manner after looking at your salary slab and also plan everything a year ahead. Then you can take benefits from the exemptions and deductions to minimize your tax liability during each financial year. Let us figure out tax planning for salaried employees for FY 2020 21 in detail. Along with it, you can also earn knowledge about how can a salaried employee file Income Tax Return.

 Plan your taxes with the help of components from Your Salary

Well, few components in every salary structure have provisions of exemptions and deductions under the Income Tax Act. Let us discuss a few of them below:

• House Rent Allowance or HRA: Under section 10(13A) that provides relaxation to the individual to claim exemption concerning the House Rent Allowance.
• Leave Travel Allowance: The exemption here can be applied for the shortest distance on a trip. Hence, every salaried individual employee can avail of the exemption for a trip around India. To claim the exemption one has to submit the bills to the employer.
• Education allowance: The employee can claim for u/s 10(14) allowance receive an exemption for child education up to 100 exempted per child for up to two children in a nuclear family. Further, if the child goes to a boarding school a further amount of 300 is exempted per child, for up to 2 children.

Other Deductible Options for Tax Planning

Section 80C states that the tax benefits are maximum to the limit of deduction combing all investments and expenditures under section 80C is1.50 lakhs. Following are the options that you can choose from:

1. Provident Fund

2. Sukanya Samridhi Account

3. National Saving Certificate- are eligible for a deduction of up to Rs 1.5 lakhs.

4. Senior Citizen saving scheme

5. Life Insurance- can claim a deduction of up to Rs. 25,000 in a financial year

Tax Filing

While filling your returns make sure you cover most of the investment. Also, consider several investment opportunities before taking any decisions. Filing your ITR leads to the right outcome in your tax planning. Simple management and smart tax planning should be followed while you plan your investments.

How can we help you?

With the onset of the Tax filing season, Taxpayers usually face a nightmare. The reason is taxpayers do not spend enough time planning their investments. Having said that, investments should be considered as one of the various options available before choosing the one that is most beneficial to a taxpayer.

If you too are struggling to file your taxes, take support from the country's promising legal portal Online Legal India™. The legal portal will provide you with complete assistance in Tax Planning & Consultancy.