We work hard all through the year to earn money. However, as a citizen of India, it is the responsibility to pay timely income tax. The government of India also provides you fare chances to save on your income tax in various ways. From mutual funds to fixed deposit, there are several ways that any Income Tax Consultant in India can suggest you. If you invest for your girl child in Sukanya Samriddhi Yojna or plan for your future by Public Provident Fund; you can easily save a good amount in your tax. For many people with higher income slabs; these common tax-saving investments are not enough.
Planning for your income tax is never a cumbersome work that you can do in a hurry. It needs your valuable time, proper knowledge and dedicated concentration to address all the possible deductions. If you have already planned your investments under Section 80 and its subsections and found out that these are not enough to cut down your income tax, then here are some excellent but unusual ways to serve your purpose.
In the following section, check out those exclusive ways that only experienced and knowledgeable Income Tax Consultant in India can suggest to you.
·Hindu Undivided Family:
If you are an Indian citizen, then you have the scope to represent yourself as a member of HUF (Hindu Undivided Family). In case you have income from multiple sources or higher income slab, then it will be beneficial for you to file your income tax as HUF.
According to the law, HUF is an independent financial entity as well as lineal ascendants and descendants of different religions like Hindu, Sikh, Jain, and Buddhist. In case you and your wife are earning 10 lakh and 7 lakh per annum respectively, both of you have to pay 20 to 30 percent of your total income as the income tax. On the other hand, as HUF, you need to provide 10% of your total income as the income tax.
The income tax laws allow having 50 to 100 percent of exemption for donation to any qualified charity. The nature of donation will decide the amount of deduction from the income tax.
Under Section 80G, you can claim 100 percent of deduction. There are so many funds like the Prime Minister’s National Relief Fund, National Defence Fund and the National Fund for Communal Harmony where you can donate to get a tax benefit.
·HRA to Parents:
If you stay with your parents who own the house, then you can claim HRA on your salary. You have to show that you are paying rent to your parents. However, before making such a claim, you need to furnish all the original documents.
·Invest through Parents:
The senior citizens can enjoy a special tax break. If your parents have low income, you can re-route your investment via ELSS or mutual fund or equity. For example, if you have 1 lakh interest income, you can gift it to your parents, instead of adding it to the taxable income.