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If the income crosses 5 lakh to 100 rupees then there will be huge loss, this way you can save income tax
If you earn up to 5 lakh rupees annually, then you will not have to pay income tax. However, filing of Income Tax Return (ITR) is mandatory. If your annual income is Rs 5 lakh or less in the financial year 2022-23, then you will not have to pay any tax. In fact, to increase the limit of non-taxable income to Rs 5 lakh, the rebate under Section-87A of Income Tax was increased to Rs 12,500. Keep in mind that the basic exempt income is only 250000 and the income above that is taxed at the rate of 5%, which is 12500 on 5 lakhs, you get the same exemption if your income is within 5 lakhs. But, here it is to be kept in mind that if your income exceeds the rebate limit of Rs 5 lakh, then you will have to bear a huge loss for every Rs 100.
This is how your tax liability will increase on every Rs 100
Tax expert Pratap Singh says that if a taxpayer’s income remains within the rebate limit of 5,00,000, then he does not have to pay a single paisa tax.
At the same time, as soon as his income is Rs 5,00,100, his tax liability suddenly increases from zero to Rs 13,021. If you understand in simple words, then on the additional income of Rs 100 from the exemption limit, the taxpayer directly gets Rs 13,021. On the other hand, if the additional income is Rs 500 then the tax liability becomes Rs 13,104, if Rs 1000 is more then Rs 13,208 and if the income is more than Rs 2000 then the tax liability becomes Rs 13,416.
What is the last date for investment in tax saving scheme?
Now the question arises that how can one get rid of the hassle of heavy income tax on additional income ranging from Rs 100 to Rs 2,000. On this, Pratap Singh says that the deadline for investment in tax saving schemes by the government for the financial year 2022-23 is 31 March 23. Now any taxpayer can avail tax exemption for the financial year 2022-23 by investing in tax saving schemes till 31st March.
Sections relating to deduction for investment and expenses 80C 80CCA 80CCB 80CCC 80CCD 80D 80DD 80DDB 80G 80GG 80GGA 80GGC 80TTA 80TTB Now suppose that you have invested a little bit in most of the tax saving schemes, then what to do?
You can save income tax by donating in PM Cares.
Related Sections 80G 80GGA 80GGC
You can get rid of your huge tax liability by donating equal to your extra income in PM Cares Fund. Understand in simple words, if you deposit 100, 500, 1000 or 2000 rupees of your extra income in PM Cares Fund, then you can avoid your entire tax liability. On the other hand, donations to political parties or financial support to research centers can also be given additional exemption in income tax.