Tax Savings and planning tips for this New Year 2020

With 2020 right around the corner, now it is a good time to understand a few tax saving tips which can help you save maximum possible amount on taxes. Read on to learn about some tax saving tips that can help you reap high returns.

1. Tax Savings under Sections 80C, 80CCC, 80CCD:
   Most commonly, investments are geared to ensure savings under Sections 80C, 80CCC and 80CCD of the Income Tax Act 1961 because of the various options available as exemptions under these sections. Combined together, the maximum exemption on tax available to investors under these sections is Rs. 1.5 lakh. You can choose from an array of investment instruments including Employee Provident Fund, Sukanya Samriddhi Account or even invest in a fixed deposit at your nearest bank. All of these investments allow you to save taxes under Sections 80C, 80CCC and 80CCD of the Income Tax Act.
   
   
2. Tax Savings under Section 80CCD (1B):
   Investing in the National Pension Scheme (NPS) allows you to save up to Rs. 50,000 in taxes under Section 80CCD(1B) of the Income Tax Act.
   
   
3. Tax Savings on Home Loan:
   If you are in the process of buying a home and have availed a home loan for the same, you are applicable for tax saving benefits under Section 24 of the Income Tax Act. The interest you pay on your home loan, up to Rs. 2 lakh, is exempt from taxes under this section.. With the new change whether the property is self-occupied or rented, tax saving benefits will apply.
   
   
4. Tax Savings for Education Loan under Section 80E:
   An education loan availed for yourself, your spouse or children for pursuing a full-time course from a recognized financial or charitable institution can help you save taxes under Section 80E of the Income Tax Act. Tax deductions are available only on the interest paid on an education loan in a financial year, but no deductions are available for the principal amount paid for the loan. This particular tax saving opportunity is available once you start repaying the education loan, and not before.
   
   
5. Tax Savings on Medical Insurance under Section 80D:
   Tax savings are also available to you when you avail medical insurance for either yourself or parents, spouse or children. If you are below 60 years of age, the maximum tax savings you can avail is Rs. 25,000, while Section 80D offers those aged above 60 years up to Rs. 50,000 in tax savings. Regardless of whether your parents are dependents or not, you can avail tax savings on the premiums you pay for their health insurance. These tax saving tips are also handy for Hindu Undivided Families (HUFs) since the tax saving can be availed by them on payment of premiums for any of the members of the HUF. 
   
   
6. Tax Savings through Donations to Charities:
   Under Section 80G of the Income Tax Act, tax savings can be availed for donations made to charitable organizations. While some donations qualify for 50% deductions of the amount donated, others are eligible for 100% exemptions. However, the maximum exemption available for donations to charitable institutions are capped at 10% of your gross annual income. Tax savings for donations to charitable organizations are only applicable on monetary donations made through cash or cheque, and not for donations made in kind such as with clothes or food.
   
   
7. Tax Savings through Donations for Scientific Research:
   Tax savings up to 100% of the amount paid as donations for scientific research can be claimed under Section 80GGC of the Income Tax Act. These include donations made to colleges and universities for conducting scientific or statistical research, or even research in social science. Tax saving under Section 80GGC are also available when you make donations to a public sector company or a local authority for eligible projects and schemes.
   
   

This New Year, make tax planning and saving a priority. These few tax saving tips can go a long way in helping you fulfill your financial goals. The more you save on taxes, the more funds will be available to you for meeting your financial goals.

Tax deduction mentioned above are subject to change from time to time. Clients are advised to consult their tax consultants before taking any tax positions 

Know more about long term savings plan, life insurance policy, and mera term plan on PNB MetLife.

The income tax is levied on all earning individuals who fall under a taxable income bracket. The income tax is paid to the Government of India and is charged annually. However, there are several tax deductions and exemptions that you can claim to lower your tax liability. The Income Tax Calculator helps you ascertain your tax output for a financial year based on your taxable income. This can help you plan well and save tax using the tax-saving deductions and exemptions, if possible.