Income tax is a direct tax that every Indian who falls in the taxable bracket has to pay to the Government of India every year. Irrespective of whether you are a salaried individual, businessman, professional, etc. you need to plan your taxes well. Unless you pay close attention to how you are spending and investing your money, you can end up paying heavy taxes which can significantly reduce the amount of money you will have left in your hand.
Thankfully, there are several legal and widely accepted ways in which you can save tax without circumventing the rules of the country. If you have been paying taxes for some time, you must have surely heard about Section 80C of the Income Tax Act 1961, the governing law for income tax in India. This section aims at promoting the habit of saving and investing among taxpayers. It can provide you with significant tax deductions if you invest wisely.
By investing in the tax-deductible instruments specified under this section, you can save a significant amount of money by having to pay lower taxes.
So let us take a closer look at section 80C and how it can help you to save taxes in the next unit of this module.