Young people who first step into the world of income by doing a job or business may not have much knowledge about income tax. Active financial planning is the key to maximising savings and ensuring a secure future. Saving on taxes is one of the things that will help you achieve your financial goals. In this article, you will learn more about income tax and some ways to get tax deductions.

Equity-linked savings schemes (ELSS)

You can get tax benefits by investing in ELSS mutual funds. These schemes will help you invest in various equity markets by availing tax benefits under the relevant provisions of the Income Tax Act. This is an ideal option for long-term wealth creation and tax efficiency.

Health Insurance Benefits

Health insurance is not only a tool to protect you from medical expenses but also a tool to save tax. Only the premiums paid for health insurance for you and your family will be taxed. As a result, taxes are reduced and income is reduced.

Plan your finances well in advance

It is important to have a financial plan. Filing income tax returns irrespective of liability helps in creating a documented financial history. This will help you find ways to save money in the future.

Setting clear investment goals.

There are many ways to invest today. These investments are also tax-deductible. Choose instruments that offer tax benefits and potential returns no matter what the goal of your investments is, such as buying a car, saving for a home, or building a retirement corpus.

Plan your taxes

Start your tax planning at the beginning of the financial year and avoid last-minute rush. This approach gives you plenty of time to choose the appropriate options and make informed decisions.