By
Shambhavi Mehrotra
,
1/6
5 tax hacks you can use
Getty Images
2/6
Invest in NPS, but not in annuity
Point to note: The entire amount withdrawn will not be tax free. Though there is no reference to this in the tax laws, one can reasonably assume that 60% of the withdrawn amount will be tax free while the balance 40% will be taxed at the normal rate.
Getty Images
3/6
HRA can be tax-free if you pay rent to parents
Point to note: If the rent exceeds Rs 1 lakh a year, one has to furnish the PAN number of the landlord while claiming exemption for HRA. If the landlord does not have a PAN, he must submit a declaration to this effect. The taxpayer must have proof of the transaction. Also, you cannot pay rent to your spouse or minor child and claim HRA exemption.
Also read: 10 tax saving strategies that can improve your financial health too
Getty Images
4/6
Invest in homemaker wife’s name
Point to note: There’s no point investing through your spouse if she is also in the same tax bracket as you.
Getty Images
5/6
Utilise exemption for senior citizens
Point to note: These options should be exercised carefully. Make yourself the sole nominee of the investments in your parents’ name to avoid disputes with siblings. In case of grandparents, there might be more legal heirs in the family.
Also read: Best tax saving options: Here is a comparison of 10 investment options
Getty Images
6/6
Invest in name of adult child
Point to note: Gifting money to an adult child and investing in his name is tax-efficient but be very careful. A gift is irrevocable and once given, there is no looking back. In your attempt to save 20-30% tax, you could lose 100% of the principal if the child is financially irresponsible.
Getty Images