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Pay 10,000/month for 10 years, Get 1,65,805/Year* for next 15 years.
ARN. No. KLI/23-24/E-BB/1201
Features
Ref. No. KLI/22-23/E-BB/999
Income tax rebates are a significant aspect of the taxation system in India, designed to provide relief to taxpayers.
Income tax rebate, also known as income tax deduction or tax relief, is a way to reduce your taxable income and, ultimately, the amount of tax you owe to the government. It allows you to claim certain expenses or investments as deductions, lowering your overall tax liability.
Income tax rebates are essential because they allow individuals and businesses to minimize their tax burden and retain more of their hard-earned money. By offering incentives for certain expenditures or investments, the government aims to encourage economic growth, promote specific sectors, and support individual financial goals.
The Income Tax Act 1961 offers several sections that offer tax rebates on different types of incomes, properties, and investments. Take a look at a few of them:
Section 80C of the Income Tax Act allows taxpayers to claim deductions for investments in specific financial instruments. Some popular deductions under this section include contributions to Provident Fund (PF), Public Provident Fund (PPF), National Savings Certificate (NSC), and payment of life insurance premiums. So, not only are you saving for the future, but you are also reducing your taxable income in the present.
Section 80D provides deductions for expenses related to health insurance premiums. You can claim deductions for premiums paid for your spouse, children, and parents. It is like a win-win situation: you are simultaneously protecting your health and getting a tax rebate.
Section 87A of the Income Tax Act in India provides a deduction in the income tax liability for certain individual taxpayers. As per the latest amendment, in both the old and new tax regimes, a maximum tax refund of ₹12,500 will be granted.
Section 10(14) deductions cover allowances and per your employer provides. It includes house rent allowance (HRA), conveyance allowance, and medical reimbursements. These deductions are a great way to reduce your taxable income and make the most of the benefits offered by your job.
One must fulfill the following requirements if they want to apply for a tax rebate:
The eligibility for income tax rebates often comes with income limitations. Different rebates have different income thresholds, and it is crucial to stay within those limits to qualify for the deductions.
Your employment type and tax filing status also play a role in determining your eligibility for income tax rebates. Whether you are a salaried individual, a freelancer, or a business owner, and whether you file your taxes as an individual or a company, all these factors impact the type of rebates you can claim.
Each rebate comes with its own set of specific conditions. For example, under Section 80C, there is a limit on the maximum amount you can claim. Additionally, some deductions require you to maintain the investment or expense for a certain period to qualify for the rebate.
There are two ways to get a “tax rebate” in India: a flat reduction in your tax liability due to your income level (Section 87A rebate) or a refund due to overpaid taxes. Here is how to claim each:
This rebate applies only to individuals with taxable income below ₹7.5 lakh in the old tax regime. You can claim it in two ways:
Income tax return applies to anyone who has paid more tax than their actual tax liability. Here is how to claim it:
Understanding and claiming the various income tax rebates available can significantly reduce your tax burden and keep more of your hard-earned money. Take the time to research your eligibility, gather your documents, and file your taxes strategically. Remember, maximizing your rebates is not just about saving money; it is about taking control of your finances and investing in your future.
Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.
Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors
Pay 10,000/month for 10 years, Get 1,65,805/Year* for next 15 years.
ARN. No. KLI/23-24/E-BB/1201
Features
Ref. No. KLI/22-23/E-BB/999
The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The content has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Further customer is the advised to go through the sales brochure before conducting any sale. Above illustrations are only for understanding, it is not directly or indirectly related to the performance of any product or plans of Kotak Life.
