Tax season is here, and with it comes the promise of sweet sweet savings. But if you’ve poured your heart into those tax-saving investments, a few critical missteps can leave you feeling deflated. Don’t let that happen! This guide breaks down 5 vital truths you need to remember for effortless tax exemptions on your investments:
- Proof Pays Off: Did you diligently invest in PPF, NPS, or insurance? Great! Now, act fast and submit proof of your investments to your employer. Don’t wait till year-end. Delaying this puts your salary at risk, as your employer might deduct higher tax in your absence. Remember, higher TDS means lower in-hand salary, and nobody wants that!
- Regime Check: With the new tax regime on the scene, most deductions are off-limits. So, to claim those juicy benefits from your investments, ensure you’ve opted for the old tax regime. If you went new last year, explicitly switch back to the old. Otherwise, the system assumes you’re sticking with new, and your deductions go poof!
- Know Your Limit: Unleash your inner investor – go all out on those tax-saving instruments! But remember, the magic number for deductions is ₹1.5 lakh. Your PPF, NPS, ULIP, SSY, fixed deposits, ELSS, all count towards this limit, so plan your investments accordingly.
- Documentation is King: Don’t let your house rent allowance exemption vanish! Submit your rent agreement and receipts promptly. Remember, if your rent surpasses ₹1 lakh annually, your landlord’s PAN becomes mandatory. So, keep those documents handy!
- Time is Money: Every employer sets their own deadline for document submission. But the golden rule is: don’t procrastinate! Submit your documents as soon as you can. Delaying puts you at risk of missing out on the benefits you deserve.
| Bonus Tip: Stay informed! Tax rules change, so keep yourself updated. This way, you can leverage the best strategies and maximize your tax savings every year. |
Content Writer at Vakilsearch
Hello! I am Monika Shanmugam. With 4 years of crafting engaging and informative content, I'm passionate about demystifying complex topics and weaving impactful narratives. My legal-writing journey began at Vakilsearch, where I spent the past year immersing myself in the intricacies of the legal landscape. This experience shaped my ability to translate legalese into digestible language, empowering individuals with the knowledge they need to navigate the legal system confidently.
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