As the name reveals, it is the tax on services that one person provides to another person. Service tax is nothing but the tax we have to pay for using the different services. For example, when we take dinner in a restaurant and then we have to pay bills that are nothing but the service tax. There are many ways to save services tax (like LIC policies, medical insurance, charities, etc.). Further, we discussed them one by one. But before we talk about how to save service tax, one thing I want to ask that, Is saving service tax is good for our country?
For saving our tax, we should plan our policies for this. There are many sections in our constitution that helps us deduct our taxes. We discuss them one by one.
Under the section 80C, LIC insurance premium paid in order to insure our family for any future incidence. This can also help us to save our taxes and reduces about 20% of the amount of insurance into tax amount.
Under the section 80D, Medical insurance premium is undoubtedly one of the best investments. It can cover for comprehensive hospitalization expenses related to accident and sickness and insure us and our family for any other medical problems. It also deduct our taxes up to 15000 to 20000 Rs for the age below 60 and up to 40000 Rs for the age above 60.
Under section 80EE, you can claim deduction in your tax amount for interest payments towards your home loans and tuition fee of your children. If someone takes educational loans for his/her children then he would also claim a deduction of the amount of loan interests from tax amount.
Under section 80G, you can claim deduction for 50% to 100% of donations made by you to a charitable institution. The total deduction for cash donation should not exceed the 10% of your gross income.
With the help of all these methods, any person can reduce his service tax without breaking any of the laws.
You may concern with Tax consultant in India for all queries.