One of my uncles (50 years old) has to pay Rs 37K tax every year, he is the sole earner in his family, he is a very simple and honest middle class man trying to provide for his family, is there any way that he can save that tax? They live paycheck to paycheck, As the tax amount is a lot for him, pls help with what can be done? I’ve seen people who earn hell lot more paying 0 taxes, pls help Home EMI= Rs 25K per month Family members= 6 (Wife, 2 daughters, Parents) No Mutual fund SIP, no health insurance, no knowledge of how to save taxes
Hey @overthinker, this is the only answer you need. no need for any new investments or anything.
income tax can be avoided if the net taxable income is less than 5 lakhs.
I'm adding the pointers that can help.
total CTC is 8.8 lacs. So, we require deductions of 3.3 lacs.
standard deduction - 50k, makes it 2.8 lacs
the next big deduction possible is interest on home loan emi. since it's 25k per month, he'll pay 3 lacs in emi annually. Assuming min 50% of that as interest, he can use 1.5 lacs as deduction using 80EE and 80EEA (max 2L). this brings the required deduction from 2.8 lacs to 1.3 lacs
the last one is section 80C, where he can claim any PF contributions. if not, the home loan principal can also be used. this a/c to our calculation is the remaining 1.5 lacs principal of EMIs. this brings that 1.3lacs to -20000.
if some issues with home loan calculation, it can vary by 20-30%, and you can use the kids education fees in 80c.
so, overall we can get the taxable income below 5lacs and can pay 0 tax.
Good luck. reply here if you need more help. I've added all sections also for your reference.
Thank you so much for this 😭 Just wanted to confirm home loan principal can also be used in deductions?
yes. it can be used as part of 80C. but do remember that you can claim a total of 1.5 lacs under 80C.
8.8 lacs CTC means around 73 k as monthly ctc .
38k is too much on that CTC Is he availing the deductions? Hope he has not switched to new regime
Yeah it’s really too much, No, he has only used Home loan EMI but that isn’t enough, could you please tell the deductions that he can use? Like Tax saver MF, health insurance what else can be done? Pls tell which regime to follow
Follow the old regime. For 8.8L CTC , the tax should be almost Nil. Ask him to show deductions under 80C, 80D , NPS , show HRA (some documentation required)
How much money can he save each month after meeting the expenses?
None, everything goes into expenses and EMI, as the salary is very low and no of dependents is high, and no other financial support
Check this tool dude, maybe of some help - https://www.zoho.com/in/payroll/income-tax-calculator/
If you don't get enough suggestions here, will advise you to spend some 1-2k and get professional suggestion from a CA.
Got an offer, I calculated the tax and it will be around 3L ( currently it was around 1.5L) it's crazy, I don't want to pay 25k each month as tax. My Gross will be around: 22L I'm 24, I don't have any health insurance other than the comp...
I have always been very intrigued about managing my own finances, never hired a CA till now.
But every year when the tax return filing time comes I run into the same thought - Am I paying too much taxes, is there a way to plan it bette...
I am a software engineer in Bangalore having base CTC 13.8 lpa. Which brings me to a tax of more than a lakh rupees, what are the possible ways to reduce this taxed amount.
