How to Avoid TDS Tax: Essential Tips and Tricks
Learn effective strategies to avoid TDS tax, including important forms and investments for tax-saving.
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To avoid TDS tax, make sure to submit Form 15G or Form 15H to your bank, declaring that your income is below the taxable limit. Invest in tax-saving options, like PPF or ELSS, that offer deductions under Section 80C. Keep your PAN updated with all financial institutions to avoid higher TDS cuts. Lastly, stay informed about TDS exemptions and rules to ensure compliance and minimize deductions.
FAQs & Answers
- What is TDS tax? TDS (Tax Deducted at Source) is a tax that is deducted by the payer at the time of making a payment to the payee. It is applicable to various income types, including salary, interest, and professional fees.
- What form should I submit to avoid TDS? To avoid TDS, you should submit Form 15G if you are a non-senior citizen or Form 15H if you are a senior citizen to your bank, declaring that your income is below the taxable limit.
- What are tax-saving investments under Section 80C? Tax-saving investments under Section 80C include options like Public Provident Fund (PPF), Equity Linked Saving Scheme (ELSS), National Savings Certificate (NSC), and Life Insurance premiums.
- Why is it important to keep my PAN updated? Keeping your PAN updated with all financial institutions is crucial because it helps in ensuring proper tax deductions and avoids higher TDS cuts on your income.