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If there is one thing that people are interested in learning and understanding at any age is how to save their taxes at the time of online ITR filing. Whether they earn less or more or are salaried or business owners, it is the favorite topic in every discussion. It is the most crucial element of financial planning, without which individuals may lose quite a significant portion of their income.
The good news is there are options to save taxes which you can easily adapt according to your age. Let’s look at them through this article.
Tax Saving Tips for People in Early 20s
Believe it or not, it is the perfect age to start planning for your future, as you would have fewer responsibilities to take care of. At the same time, it is also your initial phase, and income will be relatively less, making you wonder whether to plan for the future. So, here are some quick and simple tips that can help you save taxes and not worry about it during ITR filing.
1. ELSS
Equity-linked saving schemes are a great way of tax savings as their lock-in period is as low as three years. It is best for youngsters since it is the shortest lock-in period in all investments. With ELSS, people can save Rs. 1.5 lakhs under section 80C.
2. Health Insurance
Nobody should take chances with their health and should invest in health insurance plans, especially when it comes to tax-saving options; it is all the more incredible. It is easier to buy health insurance plans at a younger age, and with age, the insurance premium will tend to increase. You will be eligible for Rs. 25,000 deductions per Section 80D for health insurance plans.
3. HRA
It is an essential element and is covered for all salaried employees. The employer pays it to cover the rented accommodation expenses for the employee.
4. PPF
Investing under a public provident fund is another great way of saving taxes. Not only will you get a return which the government decides, but also the entire amount will be non-taxable.
Tax Saving Tips for People in Their 30s
It is the age when people start to have responsibilities on their shoulders. It could be when they decide to marry and start their family. With increased income, you may also have to pay more taxes, which means more tax savings. Although it is good to refer to an online tax consultant for tax-saving tips, in the meantime, do check the below.
1. Home Loans
Most people prefer to take home loans at this age, allowing them to claim the deductions on the repayment of the principal amount. Under section 80C, an individual can claim a deduction of up to Rs. 1.5 lakhs on principal and under section 24 for interest paid on the home loan.
2. Retirement Planning
Most people prefer to take home loans at this age, allowing them to claim the deductions on the repayment of the principal amount. Under section 80C, an individual can claim a deduction of up to Rs. 1.5 lakhs on principal and under section 24 for interest paid on the home loan.
3. Life Insurance and Health Insurance
At every stage of life, these are the most important. When you are settled and earning a little more than 20s, you can now include beneficiaries in your health insurance plans. Besides yourself, your spouse, and dependent children, you can also claim deductions of Rs. 25,000 if paying a premium for parents.
Tax Saving Tips for People in Their 40s and 50s
This is the age when most responsibilities arise. Everything comes within this age bracket, from your children’s education to their marriage. And not to forget the additional expenses such as healthcare which increase in age. So, here are some of your options during this age period.
1. Education Loan
Under section 80E, you can claim deductions if you have taken an education loan for your children’s higher education. You will be eligible for a deduction on interest paid for eight years or till the interest is paid off (whichever is earlier).
2. FDs
These can also be done early, but the 40s is a good age to start investing in fixed deposits. They are low-risk, offering investments, and suitable for long-term saving.
Bottom Line
Tax savings is an excellent strategy to prevent losing money during ITR filing. With simple strategies and tips, you can save the maximum amount allowed at every stage of your life.
