Before we teach you a thing or two about tax hacks, we want to talk to you about tax planning. Tax planning is an exercise for understanding finances or investments in order to avail the exemptions, deductions and rebates provided in the Income Tax Act. It is not just about making use of these deductions but also involves making use of available opportunities in the market to reduce capital gains that may occur on investments.
Tax planning makes a huge difference to your investment strategy. We want to share some tips and tricks to help you make the most of your hard earned money.
Top Tax Hacks
- Your EPF contributions are part of the Sec 80C limit of Rs. 1.5 lakhs.
- You can claim up to Rs. 5000 under Sec 80D for a preventive health check up.
- Inherited property is non-taxable.
- In case of a let out property, you can claim a standard deduction of 30% on your rental income.
- Remember to pay advance tax if your tax liability is greater than Rs. 10,000 in a particular financial year.
- Dividend Distribution Tax (DDT) at 28.8% is deducted by debt mutual funds when they declare/pay dividends to investors.
- Dividends on equity shares/equity mutual funds are tax free in the hands of the investor.
- You could be liable to pay tax if you receive more than Rs. 50,000 as a gift from other sources in a financial year.
- Starting this year, if you receive more than Rs. 10 lakhs p.a as dividends (excluding those from mutual funds), you could be liable to pay tax at 10% of the gross amount of dividend received.
Take advantage of these hacks and plan your taxes well ahead. And lastly, be a responsible citizen and pay your taxes on time.