Curated By: Business Desk
Last Updated: December 14, 2023, 19:49 IST
Make well-informed choices to optimise your tax-saving potential.
The Income Tax Act offers various avenues for deductions, so that people can save some amount while filing taxes.
As the financial year nears its end, it is crucial to take a look at your tax savings, investments and expenses. You must ensure you don’t end up paying higher taxes. The Income Tax Act offers various avenues for deductions, so that people can save some amount while filing taxes. There are some ways in which people can make well-informed choices to optimise their tax-saving potential in the final month of the year. The owner of ClearTax, which is India’s leading tax filing firm, Archit Gupta explains four things that people can do before December that will help them in taking their tax strategy in the right direction.
Understanding What Tax System Works for You: It is important to understand the right kind of tax system that works for people. People always have a chance to shift to a tax regime that is beneficial for them, while filing an ITR. It is important to manage them well, as the TDS will depend on the tax expenditure based on whatever regime is chosen by the people. It is important to choose the right system, so that TDS can be saved.
Taking Advantage of The Old Tax System: If someone is opting for an old tax system, then they should try to take maximum advantage of the Section 80C deduction. As per reports, people can save up to Rs 1.5 lakh on their tax by understanding the Section 80C. There are many options available, depending on the risk profile and investment time frame. Many taxpayers, who choose the old system, are not able to avail the full benefits of Section 80C. As a result, they have to pay some additional tax.
Reviewing the Stock Market: Reviewing the taxes paid on the profit of the stock market can also help in understanding ways to save taxes. If people are able to review the capital gains, they can see a possibility of reducing tax expenditure through tax collection on their profits.
Job Switch: Another strategy that can be used is if someone has switched their job this year, they should ask for a salary and tax calculations from their previous employer. Then, this should be shared with the current employer, so that better tax calculation can be done. This will help people to avoid paying higher taxes while filing an ITR.