Professional taxes are one of those universal realities that no one loves but must accept. In most cases, you wind up paying taxes both directly and indirectly. While you may not have much control over indirect professional taxes since they depend on how much money you spend, you may utilize tax refunds to offset direct taxes.
An income tax refund enables you to legitimately lower your direct professional tax due while not concealing your income and using an income tax calculator. The bulk of professional tax breaks is provided for transactions that are too crucial to overlook in life or for long-term investments.
As a result, the money you spend to claim an income tax refund largely stays in your pocket, and you save professional tax as a result.
Here’s a breakdown of income tax refunds and also the best income tax calculator for better calculation.
What is Income Tax Rebate?
An income tax rebate is a tax refund given to a person if the tax paid exceeds the tax due. In other words, you will get a tax refund at the end of each fiscal year if your tax burden is less than the amount you paid. If you wish to collect the income tax refund, you must submit an Income Tax Rebate within a certain time frame.
Fortunately, the Indian Income Tax Act provides several possibilities for you to preserve a significant portion of your income from taxation. You may utilise the act’s many professional tax breaks to decrease your yearly direct professional tax burden.
The sole requirement for obtaining the income tax refund is that you submit your income tax return on time. Because the income tax rate in this nation is progressive, higher income receives higher direct tax rates.
Thus, depending on your professional tax rate, you may save anywhere between Rs 12,500 and Rs 1.25 lakhs by taking advantage of income tax refunds. The bulk of transactions qualifying for tax breaks are long-term investments, financial security for the family in case of an emergency, or required schooling or house needs.
Section 80C – Deductions on Investments
Part 80C is a popular and well-liked section among taxpayers because it enables them to lower their taxable income by making tax-saving investments or incurring qualified costs. It enables a maximum deduction of Rs 1.5 lakh from the taxpayer’s total income per year. Individuals and HUFs may both profit from this deduction. This deduction is not available to corporations, partnership businesses, or LLPs.
Section 80 TTA – Interest on Savings Account
If you are a person or a HUF, you may deduct up to Rs 10,000 from the interest income earned on your savings account with a bank, cooperative society, or post office. Include the interest from your savings account in your other income.
The Section 80TTA deduction does not apply to interest income from fixed deposits, recurring deposits, or corporate bonds.
Section 80GG – House Rent Paid
Deduction for House Rent Paid Where HRA is not Received
1. When HRA is not received, a Section 80GG deduction is possible for rent paid. The taxpayer, spouse, or minor kid should not possess a home near the location of work.
2. The taxpayer should not own any other self-occupied residential property.
3. The taxpayer must be renting and paying rent.
4. Everyone is eligible for the discount.
Section 80E – Interest on Education Loan
Individuals may deduct the interest paid on loans used to further their education. This loan might have been taken out for the taxpayer, his or her spouse or children, or for a student over whom the taxpayer has legal custody.
The 80E deduction is allowed for a maximum of 8 years (starting with the year the interest begins to be repaid) or until the whole interest is returned, whichever comes first. There are no limits to the amount that may be claimed.
Section 80D – Medical Insurance
You (as a person or HUF) may deduct Rs.25,000 for insurance for yourself, your spouse, and your dependent children under section 80D. If your parents are under the age of 60, you may claim an extra Rs 25,000 discount for their insurance. If the parents are above the age of 60, the deduction amount is Rs 50,000, up from Rs 30,000 in Budget 2018.
If both the taxpayer and the parent(s) are 60 or older, the maximum deduction permitted under this clause is Rs.1 lakh.
For example, Rohan is 65 years old, and his father is 90 years old. In this scenario, Rohan’s maximum deduction under section 80D is Rs. 100,000.
Section 80GGB – Company Contribution
80GGB Section An Indian firm may deduct the amount it contributes to any political party or an electoral trust. Contributions made in any manner other than cash are eligible for a professional tax deduction.
Section 80GGC – Contribution to Political Parties
Individual taxpayers are eligible for a deduction under section 80GGC for any money paid to a political party or electoral trust. It is not accessible to enterprises, municipal governments, or artificial juridical persons that the government entirely or partially sponsors. This deduction is only available if you pay by a method other than cash.
Section 80RRB – Royalty of a Patent
The 80RRB deduction is allowed for any royalty revenue received for a patent registered on or after 1 April 2003 under the Patents Act 1970, up to Rs.3 lakh or the income received, whichever is less. The taxpayer must be a single patentee who is also an Indian resident. The taxpayer is required to provide a certificate in the appropriate form, signed by the authorized authority.
How to Use the Income Tax Calculator To Calculate Tax Rebate?
It is quite easy to use the income tax calculator. To calculate your professional tax due, just provide the following information in the income tax calculator:
● Choose your age category since tax obligation in India varies according to the taxpayer’s age.
● Enter your Gross Annual Revenue, which includes your salary, profits, and other sources of income.
● You must now input information on your tax-saving investments made under section 80C of the Income Tax Act, including sub-sections 80C, 80CCC, 80CCD (1), 80D, and 80CCD.
● Once completed, you will be able to obtain a summary of your yearly income, investments, taxable income, and tax due based on the most current tax regimes and computations.
Wrapping It Up
Every Indian citizen needs to pay professional tax on or before the due date. Failure to do so might result in a variety of penalties, including significant fines and imprisonment under the IT Act.
Furthermore, Canara HSBC Oriental Bank of Commerce Life Insurance is a good alternative for individuals looking to purchase a tax-saving plan online. You can also try our online income tax calculator to save more tax.