Interest income on savings bank account is not taxable up to Rs 10,000. Any amount received as interest in savings bank account excess of Rs 10,000 is taxable.
Amount received as Gifts from relatives:
Any amount (cash/cheque) received from relatives is totally tax free. You can receive gifts from your relatives, friends and family on the occasion of marriage without any fear of paying taxes on that amount as it is fully tax free.
Investment in Life Insurance and Maturity amount of LIC:
As we know investment in Life Insurance is eligible for deduction up to Rs 1,50,000. Similarly, any proceeds received on account of maturity/surrender of insurance policy were also to be exempt from tax only if the premium paid did not exceed 20% of sum assured.
Profits on selling of Shares or Mutual Funds:
Any long-term capital gains arising on sale of equity shares listed on stock exchange fully exempt from income tax. Just have to hold the shares for more than 1 year. Same goes for Equity Mutual funds.
Exemption on Agriculture Income:
Any income derived from agriculture income in India is fully exempt.
Any rent or revenue derived from Agriculture land in India
Any income derived from such land by agricultural operations
Any income derived from any Farm building
Money received from Provident fund:
As we know investment in Provident fund is eligible for deduction in the year of investment. Similarly, interest received on PF investments if not taxable.
Going for Housing Loan is one of the best ways tax savings
Principal amount is allowed as deduction in section 80C limited to Rs 1,50,000
Interest is allowed as deduction under section 24
If Let out– Any amount of interest
If Self occupied– Up to Rs 2,00,000
Deduction of Rs 25,000 of self, spouse and dependent children for investing in medical insurance. Similarly a deduction of Rs 30,000 for medical insurance of parent’s above age of 65 years and Rs 5,000 is allowed (cash/cheque) for preventive Health checkups.
HRA – House Rent Allowance:
As we know House Rent Allowance is the easiest way of saving tax. It applies to anyone who lives in rented house.
Minimum of the three allowed as exemption
Actual HRA received
Actual Rent paid minus 10% salary (Basic + DA)
50% (for metro) / 40% (for non metro) of salary (Basic + DA)
Leave Travel Allowance
LTA can be claimed when an employee goes on a vacation and submits the actual bills to the employer. You can avail this facility twice in the block of four years. If you were not able to claim this benefits in four year block then you can carry over and claim one vacation in next block, provided you avail in the first year of the block itself.