How Can A Salaried Woman Save Taxes?

Income tax is one of the expenses that can have a negative impact on your finances. The truth is that the higher your cost-to-company (CTC) or annual package, the more taxes you will have to pay. But the Income Tax Act contains numerous provisions to assist salaried women in lowering their taxable income. 
 
Read on to check out these smart tips to save on taxes.
 

Ways to Bring Down Taxable Income for Women

 

1. House Purchase

   There are numerous ways to finance your new home. You can get a home loan or a loan against your property (if you already own real estate). In both cases, you are eligible for the following tax benefits.
    
   • Section 80C allows for a deduction on principal repayments of up to Rs 1,50,000 per financial year. You can file a deduction for the payment of stamp duty and registration charges.
   • Section 24 allows for a deduction on interest payments of up to Rs 2,00,000 per financial year.
   • Section 80EE provides additional tax benefits of Rs 50,000 if you are a first-time homebuyer and the loan value does not exceed Rs 35,00,000 with a property value of less than or equal to Rs 50,00,000.
    

1. House Rent Allowance (HRA)

   HRA is the component of your salary that your employer provides to make accommodation easier on your pocket. It is eligible for tax benefits under Section 10(13A). 
    
   The least of the following will be a tax exemption for women.
    
   • Actual HRA received
   • 50% of your salary [basic + DA]. If you live in a metro city.
   • 40% of your salary [basic + DA]. If you live in a non-metro city.
   • Actual rent paid (less than 10% of your salary)
    

1. Education Loan

   If you have previously obtained an education loan, you can claim tax benefits on the interest payment under Section 80E. There is no upper limit on the deduction amount. However, you can only claim them for a maximum of 8 years. Interest paid after 8 years cannot be deducted to reduce taxable income for women.
    

1. Savings Account

   You may be unaware that the interest income you earn on your savings account is tax deductible. Section 80TTA allows you to claim a tax deduction of up to Rs 10,000 on savings account interest.
    

Also Read: What is Rebate in Income Tax?
 

1. Health insurance

   The rising cost of healthcare facilities has increased the cost of medical treatment in India. Even a minor cough and cold can quickly drain tens of thousands of rupees. Given this, you must purchase standard health insurance and supplement it with appropriate riders.
    
   Investing in health insurance also provides tax benefits under Section 80D. The deduction limit ranges from Rs 25,000 to Rs 50,000, depending on your age. If you purchase medical insurance for your dependent parents, the total deduction benefits can reach Rs 1,00,000.
    

1. Make an investment

   There are numerous tax-advantaged investment options available on the market. The majority of these investments are tax deductible under Section 80C. The list includes the following.
    
   • Public Provident Fund (PPF)
   • Employee Provident Fund (EPF)
   • Equity Linked Saving Scheme (ELSS)
   • National Saving Certificate (NSC)
   • Sukanya Smriddhi Yojana (SSY)
   • Unit Linked Insurance Plan (ULIP)
   • Tax-Saving Fixed Deposits (FDs)
    

1. Food Coupons

   Various companies provide food coupons as a variable that is not specified in your salary breakdown. You can ask your company's human resources department to clearly specify this in the salary slip. That is because food coupons can reduce your taxable income by Rs 26,400 per year.
    

1. Income

   If a salaried woman receives a gratuity after retirement or due to an emergency such as inability to work due to disability, she must file the amount for exemption. Gratuity is subject to a tax exemption for women of up to Rs 20,00,000 under Section 10 (10) (iii) of the Income Tax Act. However, before claiming tax benefits, you must understand the gratuity computation method and the amount that can be claimed.
    

Also Read: All You Need To Know About the New Income Tax Return Forms
 

Final Words

Investing in 80C schemes is the simplest way to save tax. It will not only save you taxes, but it will provide you with a corpus after a certain period. Aside from that, make an effort to understand your salary components. Different allowances are treated differently, and the majority of them are tax-exempt.