Have you promised yourself to do better with money this year? Well, 2018 is when your financial dreams come true, as we look into the seven ways to make more money. Our article will go through many methods to increase income, including some sneaky best ways to save tax in India.
7 Ways to Make Money
There are many options out there, especially with such easy access to the internet. Let’s now look at seven favorite ways to make money.
Negotiate for A Transport Allowance to Go with Your Salary
You can claim for travel allowance from your employer, which is funding for your commute between your work and home. You can either opt for:
- A monthly allowance of Rs. 1,600.
- And it works out at Rs. 19200 annually.
Both of them schemes are exempt you from paying tax.
Use Food Coupons
Use a small part of your salary to claim food coupons
Benefits of Food Coupons:
You are exempt from tax of up to Rs. 55 per day. You get to claim for two meals for 22 working days, which gives you Rs. 26,400 annually.
This scheme is one of the best ways to save tax in India.
Get Medical Insurance for Your Whole Family!
Good health insurance can cover you, your children and your spouse, which allows a tax reduction of up to a maximum of Rs. 25,000.
Under section 80D (Indian tax law), it states that you can even claim an additional Rs. 30,000 by securing your parents too.
How to Maximize the Section 80C Deduction
If You Claim the Total Rs 1.5 Lakhs:
Under section 80C, you can reduce your annual tax by Rs 45,000 – providing you fall into the 30% tax bracket.
You Can Also Claim Several Other Expenses:
- Contributing to EPF.
- The premium you paid for your life insurance.
- School fees.
- You are making repayments on your home loan.
What to Do With The Remaining Balance of 80C?
Choose investments like:
PPF is a favorite and best way to save tax – controlled by the Government of India, and it offers high returns on fixed deposits. Unlike the stock market, the interest rate is far less volatile in comparison. It’s a long-term investment and has a lock-in of 15 years. However, one of the benefits is the amount of tax it exempts too.
It’s an equity-linked savings scheme that efficiently saves tax. Classed as an equity fund, it invests the minimum of 80% in equity and other related instruments of numerous businesses.
So if you love to dabble in investment; this could be one of the best ways to save tax and make money.
SIP stands for Systematic Investment Plan; it’s another way to invest in mutual funds. You need to pay in every month, instead of paying one initial deposit.
You invest in periodic duration’s like Quarterly/Monthly etc. and get to make ten investments of Rs. 1000, while not having to change any other financial liabilities.
It works best for those on a tight budget, as many repayments mean you pay smaller amounts to join, e.g., Rs. 500 per month or Rs. 1000 per month.
Send Vacation Bills Before the Deadline
Are you making a trip inside India? Then claim for a Leave Travel Allowance (LTA) from your employer – how it’s not mandatory for them to supply this scheme.
It can only get claimed by your employer, and it gives you the fare for the shortest distance between two locations. If traveling by plane, then the exemption only offers for economy class.
So if you’re lucky enough to receive this from work, then make sure to send in your vacation bills on time.
Do You Rent Your Home? Then Claim Tax Benefits on Rent Repayments
If you receive a fixed salary and pay rent, then claim tax benefit on HRA – which is either partially or fully exempt from paying tax.
It’s also available to those who still live at home and pay rent to parents. However, they must include this on their tax return.
Send in Your Medical Bills on Time
The majority of workers are entitled to medical reimbursements of Rs. 15,000.
You can submit the following:
- Medicine bills
- Doctor consultations
- Lab test bills
Similar to vacation bills, this scheme can only get provided by your employer.
Also Read: How to Save Money on Personal Finance
The Bottom Line
We’ve looked at all the best ways to save tax, which will be sure to help you keep your money this year. Many of the options aren’t just for the benefits of avoiding tax, but you can also make a significant profit from them too.
Just make sure to do a lot of research before taking out any of the plans, and don’t be afraid to make a lot of comparisons, to work out the best way to save tax.