New Delhi | Jagran Business Desk: As responsible citizens of the country, we must pay full taxes and on time. However, most of us are unaware of the dual benefits of tax savings and often rely on Section 80C deductions from investments such as the Employee Provident Fund (EPF). All of these taxpayers need to know that there are several ways, such as an investment or gift to your family, that they can use to save on taxes through certain deductions. So that the 2020-2021 financial year comes to an end, there are four ways in which you can save taxes with the help of your family:
Make an investment on behalf of your family:
Economists suggest that investing in the name of the family can help people save taxes. They suggest that certain investments – like PPF and mutual funds – can be made in tax-free PPF or equity funds when profits are less than Rs 1 lakh per year. It should be noted that the government has granted a tax exemption on interest income of up to Rs 1,500 per child for up to two children under Section 10 (32) in a savings account.
Take out credit:
Taking out a loan can also help you save on taxes. When money given to your spouse is invested in a tax-exempt instrument such as PPF, the rules exclude interest income.
Payment of rent to parents:
You can also claim deductions by paying rent to your parents, but this will require certain documents such as sidewalk bank statements, lease agreement, and housing association notice.
Education loan for children:
If you have taken out an educational loan for your children, you are entitled to an income deduction in accordance with Section 80E for interest repayment for a period of up to eight years from the start of interest repayment.