How to Save Taxes for the Financial Year 2017-18?

A taxpayer can increase his/her tax saving and lower his/her income tax liability by using the benefit of provisions relating to deductions/exemptions from taxable income under various sections of Income Tax Act.

Let’s find out how a taxpayer can do maximum tax saving

1. A taxpayer can save taxes by buying a Home in Joint Name:
   
   Buying a home in Joint Name will help buyer save taxes in the following way: -
   For a self-occupied property, a deduction of up to Rs. 2 lakh is allowed on the interest of the home loan. If the house property is let-out and if by chance, there is a loss, then, in that case, there is a limit of Rs 2lakh to set off any losses from the house property against other income heads. This unabsorbed loss will be carried forward and set off over an eight-year period.

  If you have bought a property jointly and you are also paying the home loan jointly then each joint holder is allowed to claim a deduction of up to Rs 2 lakh.
   Under Section 80EE: First time Home Buyers
The first time Home Buyers can claim an extra deduction of up to Rs. 50,000 on home loan interest under the above-mentioned section. Here are a few conditions to claim deductions under the above-mentioned section

         The taxpayer must be an individual (Resident or Non-Resident).

• The loan must be taken for the acquisition of the property.
• The loan should be sanctioned in FY 2016-17.
• Loan amount should not be more than Rs. 35 Lakh.
• The value of the house should not be more than Rs 50 Lakh.
• The home buyer should not own any other residential house at the time of loan sanction.
• You must know, that if you claimed the interest under section 80EE, then you cannot claim deductions under other sections of the deductions.

2. Leave Travel Concession can help you save taxes:
   Leave Travel Concession or LTC exemption is allowed to a taxpayer who is a salaried employee for 2 domestic journeys taken in a period of 4 calendar years. 
   The present period of four years commenced on January 1, 2017. In that case, if you haven't taken that any break last year, you can do it now, using your LTC. To claim LTC you must maintain proper records.

3. Tax saving by Additional contribution to National Pension System (NPS):
   You can claim additional tax benefit of up to Rs. 50,000 towards additional contribution to NPS. This benefit can be claimed in addition to the limit of Rs. 1,50,000 of section 80C and 80CCD.

4. A non-salaried individual on par with a salaried individual:
   The deduction under NPS cannot exceed 10% of salary in case of a salaried employee or 10% of the gross total income in case of other individuals.
   For salaried employees, 10% of additional deduction of salary is allowed with respect to employer’s contribution under section 80CCD (2). Thus, salaried employees get an overall deduction of up to 20% of the total salary income.
   Thus from A.Y 2018-19, a deduction under section 80CCD (1) to individual other than employees, is 20% of gross total income.
   
   
5. Section 54EC: Investments in Notified Bonds
   The existing section 54EC provides exemptions up to 50 lakhs with respect to long-term capital gains invested in bonds issued by NHAI or RECL.
   These days, investment in notified bonds which are redeemable after three years shall also be eligible for the exemption under this section.

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