How to Save Tax on 12 Lakhs Salary?

I’ve provided some effective ways to reduce

how to save tax on 12 lakhs salary

. You will be able to discover effective strategies to save tax on a 12 lakh salary, including deductions, exemptions, and smart investment options.

How to Save Tax on Salary Income of 12 Lakhs?

1. Deductions under Section 80C: Maximum Deduction: Rs. 1.5 lakhs

Eligible Investments/ Expenses:

• Public Provident Fund (PPF)

• Employee Provident Fund (EPF)

• National Savings Certificates (NSC)

• Tax-saving Fixed Deposits (FD)

• Equity Linked Savings Scheme (ELSS)

• Principal repayment on home loan

• Life Insurance Premiums

• Children's Tuition Fees

• Sukanya Samriddhi Yojana

1. Section 80CCD(1B): Additional deduction of Rs. 50,000 over and above the 80C limit for contributions to NPS.

2. Medical Insurance Premium (Section 80D) Up to Rs. Rs. 5,000 for self, spouse, and children. Additional Rs. 25,000 for parents (below 60 years). Additional Rs. 50,000 for senior citizen parents

3. Self-occupied property: Deduction up to Rs. 2 lakhs on the interest paid on home loan.

4. Let-out property: Entire interest paid can be claimed after adjusting the rent received.

5. Standard Deduction Amount: Rs. 50,000 is automatically deducted from the salary income.

6. If you live in a rented house, you can claim HRA exemption: Actual HRA received.  50% of salary (in metro cities) or 40% (in non-metro cities). Rent paid minus 10% of salary The least of the above is exempt from tax.

7. Deduction on the interest paid on an education loan for higher studies for self, spouse, or children. Donations to specified funds and charitable institutions. The deduction varies from 50% to 100% of the donated amount, subject to certain limits.

8. Savings Account Interest (Section 80TTA)

   :

   Rs. 10,000 on interest earned on savings account deposits. 

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