Nobody likes to pay income tax. The reason is very obvious - why would anyone, under no pressure at all, want to pay a part of their income to the government, even though knowing most of it isn’t going to be used as it should be. Besides, even the government allows Indian citizens to claim tax benefits from their taxable income under different provisions. So, since the dates for tax filing are approaching, below are some effective and completely legal ways of claiming tax benefits.

  • Buy a house and save up to 4 lakhs per annum. That said, you have to buy the home using a home loan in order to be eligible for the said tax deductions. In addition, you need to be a first-time home buyer to be eligible for the home loan tax benefits. Second home owners don’t qualify for the deduction under section 80C (up to 1.5 Lakhs on the principal component), 24B (up to 2 lakhs on the interest component), and 80EE (additional deduction up to a maximum of Rs 50, 000 over and above the given average). They can only set-off their loses against the said deductions.

  • Buy a health insurance for yourself, your family and your parents. This deduction is available under section 80D, and the maximum limit in Rs 25, 000. That said, if you buy health insurance for your parents as well, you can claim an another Rs 25, 000 as deduction as long as both parents are under 60. If your parents are above 60, the deduction limit would increase to Rs 50, 000.