Top 7 unusual ways to save income tax

In order to save a huge chunk of your income in India, you will have to pay close attention to the available tax-saving financial products. 

If you feel that you have been paying a large part of your income on taxes, then it is very likely that you have not planned your taxes well. 

The Income Tax Act of India allows the citizens to save taxes by way of deductions. People can claim the deductions at the time of filing their tax return. 

If you want to claim the highest possible refund at the time of filing taxes. Let’s take a look at seven of the most unconventional methods. 

1. Deductions for children’s tuition fee

A parent can claim a deduction on the amount paid as tuition fees to any other educational institution. If you have 2 kids, you can claim a deduction on the money spent as tuition fees.

2.Save taxes on wedding gift

Gifts received on your wedding day regardless of their value, whether in the form of a gift, cash, or cheque, are exempt from taxation under Section 56(2) 

3. Route your investments through parent

Gifts received on your wedding day regardless of their value, whether in the form of a gift, cash, or cheque, are exempt from taxation under Section 56(2) 

4. Expenses for telephone and internet

As per Rule 3(7)(ix) of the Income Tax, telephone reimbursement provided to employees during the period of their service to the organization is not taxable. 

5. Money spent on donation/charity

Tax deductions can also be claimed for donations made to any fund, institution or charitable trusts. Only donations made to prescribed funds qualify as a deduction. Some are eligible for a 100% deduction, while others are eligible for a 50% deduction.   

5. Money spent on donation/charity

However, you need to keep in mind that only donations made in cash (cash is allowed up to 2000 INR) or cheque-based donations are eligible for tax deductions.

6. Contribute to National Pension Scheme

If you invest in NPS, you may claim tax benefit under Sec 80CCD(1) with an overall ceiling of Rs. 1.5 lac under Sec 80 CCE.

6. Contribute to National Pension Scheme

What you may not know is that you can claim an additional deduction of Rs.50,000 under Section 80CCD(1B) of Income Tax. So to save a little extra, contribute more to NPS.  

7. Pay for Parents’ Health and Health Insurance

Section 80D allows a taxpayer to claim a deduction of up to 25,000 INR for paying the health insurance premium for yourself and your family.