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Saving money on taxes in India: The rising tide of Income Tax Software 

With the rise of automation, you need not fret about missing essential ITR filing deadlines anymore. Numerous income tax software and popular online tax filing platforms are available at your fingertips with just a subscription, making the process easier and more efficient.

Benefits of staying attuned to income tax software

  • Income tax software is beneficial because it can help taxpayers find all available deductions.
  • The software scans financial records to suggest deductions that might have been missed, so taxpayers can claim all possible deductions and save money on taxes.
  • Income tax software also simplifies the process of claiming deductions by doing the calculations and paperwork automatically, which saves time and reduces the chance of errors.
  • By providing an estimate of tax savings from deductions, the software helps taxpayers make informed decisions about their finances.

Ways to reduce tax on your salary

To lower the amount of tax you owe on your salary, you can take advantage of various deductions and exemptions that are available under the Income Tax Act. These may include allowances such as HRA (House Rent Allowance) and LTA (Leave Travel Allowance), as well as the Standard Deduction. You can also consider using Section 80C, which allows deductions up to Rs 1.5 lakh for expenses and investments. If you invest in the NPS (National Pension Scheme), you can claim an additional deduction of up to Rs 50,000. Other tax-saving opportunities can be found under sections like 80D, which provides deductions for health insurance premiums, and 80E, which allows deductions for interest paid on education loans.

Employees who earn a salary and receive a house rent allowance as a component of it, and who pay rent, are eligible to claim an exemption for the HRA. This can help reduce their taxable income, either in part or in full.

Let us unfold the maximum you can deduct under the umbrella of section 80D

For insurance premiums for oneself, spouse, and dependent children, the maximum deduction allowed is Rs 25,000. For insurance premiums for oneself, spouse, dependent children, and dependent parents below 60 years of age, the maximum deduction allowed is up to Rs 50,000. If the dependent parents are above 60 years of age, the maximum deduction allowed increases to Rs 75,000. Besides, if an individual is above 60 years of age and pays for insurance premiums for oneself, their spouse, dependent children, and dependent parents who are also above 60 years of age, they can claim a maximum deduction of Rs 1,00,000.

Let us tap into the deductions you can claim under Section 24

If an individual’s house property is self-occupied or unoccupied, Section 24 permits a deduction of up to Rs 2 lakh for home loan interest paid. However, if the house is rented out, the entire interest amount can be deducted from the “Income from house property.” This deduction is reduced to Rs 30,000 if certain conditions are not met, such as the home loan being taken for the purchase or construction of the house property, the loan is taken after 1st April 1999, and the completion of the house construction within 5 years, in the case of house construction.

FAQs: 

  • Can income tax software be hard to use? 
    • No, income tax software gets created to be user-friendly and easy to use. 
  • Does income tax software hold the potential to assist me in saving money on taxes? 
    • Certainly, income tax software can aid in recognizing all possible deductions and preventing you from overlooking any chances to minimize your tax obligation. By automating the tax preparation process and simplifying calculations, the software can help you maximize your tax savings. Besides, the best software brings you access to tax expertise and helps you navigate through the newest trail of tax-saving instruments. 

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