Tax Deducted at Source (TDS) from your salary depends on your tax slab rate bracket. It’s a fixed percentage deducted by the company. However, there are methods to potentially reduce or avoid TDS deduction.
Submit Form 15G or 15H
To prevent TDS deduction, you can submit Form 15G or 15H. Form 15H is for senior citizens, applicable if there’s no tax on total income.
Opt for Investment Options
Investing in various schemes can help in TDS reduction. These include:
- PPF (Public Provident Fund)
- NPS (National Pension System)
- ULIP (Unit-Linked Insurance Plan)
- Sukanya Samriddhi Yojana
- Tax Saving FD
- ELSS (Equity-Linked Savings Scheme) Fund
Investment Schemes Overview:
- PPF: Government scheme offering returns on small investments with deduction under section 80C.
- Sukanya Samriddhi Yojana: Provides a maximum rebate of up to Rs 1.5 lakh annually under Section 80C.
- NPS: Investing in NPS can save TDS under Section 80CCD of the Income Tax Act, 1961.
Saving TDS on Home Loan
For first-time home loan takers, TDS on salary can be saved under section 80EE. Maximum exemption of up to Rs 2 lakh annually can be availed.