ITR Filing 2025: These days the process of filing income tax returns is going on. Your family can also prove to be helpful in saving income tax. Taxpayer can also save tax through his parents and reduce tax liability. Let’s know how
ITR Filing 2025: Every taxpayer wants to have the least burden of income tax on him. To reduce the amount of money spent in the form of tax, taxpayers take the help of many investment options. Your parents can also help you in saving tax. This is because the elderly get some deductions under various sections of the Income Tax Act, 1961. When you do your investment and tax planning through your parents, your tax burden will be reduced, but your parents’ tax expenses will increase. Therefore, tax planning should be done in such a way that the total tax burden on the family does not exceed the previous tax burden. There are some tax provisions that will help you do this.
Actually, in the new tax regime in Budget 2025, the income tax exemption limit has been increased to Rs 12 lakh. Apart from this, there is a deduction of 75 lakhs. In such a situation, up to Rs 12.75 lakh has become tax free. This has given great relief to taxpayers. In the new tax regime, taxpayers have been given more relief than the old tax regime. In such a situation, the new tax regime has become much easier.
Save tax by investing in NPS
You can save tax by investing in National Pension System. If you invest in NPS, your company can invest up to 14% of your basic salary. If this investment is made by the company, then it is completely tax free. With this, you can create a huge fund till retirement. At the same time, whatever amount is deposited after the age of 60, 60% of it will not be taxed.
Invest in EPF
Most employees contribute a minimum of Rs 1,800 per month to EPF, but you can contribute up to 12% of your basic salary. The company’s contribution is also tax-free, increasing your retirement savings. However, you should increase your contribution according to your financial plans.
Buy investment plans for parents
This is a controversial but technically valid method. If your parents do not earn, you can use their account by gifting them. This reduces their taxable income and you can save tax. However, this should be done carefully, and proper documentation is necessary. You can invest in a plan as a gift for your parents. There is no tax on the income from its interest. If you have to invest a large amount, then make a will, so that there are no legal hassles in the future. This strategy can be used with any member of the family except your spouse and minor children. The income that your spouse accrues from the money you transfer is added to your income and taxed accordingly.
Choose arbitrage funds instead of FDs
If you invest in fixed deposits or debt funds, tax is levied on it every year according to your income slab. But the case is a little different in arbitrage funds. These funds give returns similar to debt, but their tax treatment is similar to equity. If you hold an arbitrage fund for more than a year, then only 12.5% tax is levied at the time of redemption. In this regard, these funds can become a better option for low-risk investors, especially for those who want to come under the new tax regime.
