As they say, ‘The best way to save money is not to lose it.’ Tax planning and management is the first step in the direction of saving money. Saving money in turn means an increase in income. As per the taxation rules, several options are provided to avail deductions and concessions by allocating the funds to investment, savings or showing expenditure. All this and much more can be done if you know how to reduce tax by diverting your money within the same financial year.
Although the common belief goes that the more income you have, the more tax you will pay. However, there are ways and means to avoid doing this. Most of the time people are not aware of the tactics and techniques to escape paying high tariffs and saving on the sums of money. Let us explore some useful tips to save money from unnecessarily going into taxes:
Deductions for Work from home: Since the emergence of the pandemic, there has been a radical change in the way people work. This means that due to restrictions and safety measures, work from home became the norm. The tax system provides deductions and concessions in numerous ways to be able to save some money as non-taxable when you spend it on equipment like furniture, computer and internet, connectivity devices like phones and several other essential equipment required in order to work from home.
Personal contributions to your retirement funds: This is another prolific method of saving money along with securing your future. The tax deductions accept payments made towards superannuation over and above the contribution of your boss.
Medicare surcharge waiver by taking private health insurance: one of the most prudent ways to evade unnecessary taxation is to opt for health insurance which covers up in place of getting a surcharge levied. This is particularly useful for all those professionals whose surcharge falls under the Tier II or Tier III category.
Get a higher degree: Study dreams are often left unfulfilled due to the mundane work pressures and occupancy. This is the time and opportunity to give a boost to your stagnant qualification by opting for suitable courses related to self-education, professional growth, managerial skill or continuation of one’s education. The expenses on these are considered value addition and thus do not add to your taxable income.
Protection of Earnings by insurance: A sudden dip in the earnings can leave a household shattered. To avoid any such similar situation, it is advisable to go for income protection insurance, which has the add-on benefit to be excluded from taxable income earned.
Give donations: Considered the duty of every human being, donating a part of your earnings for the welfare of the society is indirectly beneficial to you also as it reduces your taxable income amount.
Consult experts: This is a sure-shot solution to your problems as the experts would always know just what needs to be done. They would guide and advise and suggest ways and means of dodging the heavy payments that you might need to do otherwise. Their cautious and far-sighted approach will help you squeeze out of the taxation net like a cakewalk.
Knowing how to lessen the tax burden is as important as having know-how about the means to do it. That’s where the professionals walk in and lead you out unscratched. So come and benefit from the services of the experts in this field.