Every period occupying a regular part of calendar year comes to file taxes; it is a fretful interlude, when most of us get anxious about the deductions that will act as a meteor in our pockets.
Here is income tax saving tips for you:
💡 Balance off the gain from capital losses
Is it known to you could balance short-term losses against long-term capital gains? Short-term capital losses such as that incurred from investing in stocks can be set against long-term capital gains like that gained from debt funds or sale property. For example, you have paid off the home loan and sold the property for a profit of Rs. 40 lakh. At 25%, the amount of tax payable is Rs 10 lakh. In the same year, however, if you have sold stocks at a short-term loss of Rs. 4 lakh, then your taxable amount will be Rs. 36 lakh.
➡ Proof Required – Ensure you keep the statement of your trading account, including the details of transactions for which you have incurred losses.
💡 Acquire a way to save educational expenses
Increasing the cost of education is a major concern for parents. In the case of education, the taxman is relatively favourable. Under Section 80C and 80E, interest on educational loans for children as well as spouses (excluding relatives and siblings) is deductible from taxable income for the first eight years.
➡ Proof Required – For claims on interest paid on education loans, you need to present your loan account statement as proof.
💡 Lighten the weight of medical expenses on illness of dependants
The taxman understands that in circumstances where a dependent is chronically ill, medical expenses can weigh down taxpayers. Therefore, under Section 80DDB, an annual deduction of INR 40,000 or INR 60,000 for senior citizen dependents claimed. Deductions can be claimed on only certain diseases, some of which include, advanced stage of AIDS, haematological disorders such as haemophilia, neurological diseases such as Parkinson’s, dementia, chorea, and chronic kidney failure. To be eligible for a claim, dependents (parents, children, spouses, and siblings) should not have claimed for deduction separately.
➡ Proof Required – For claims on medical expenses on an illness, of dependants, you need a medical certificate and details of the illness from a certified medical professional in a government hospital
💡 Remember: It is not about avoiding taxes but the tax saving options, which will help to reduce your tax liability.
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