• Rental Income of House Property: All the income accreted from the property let out also are taxable except for the expenditure allowed, which includes interest for a housing loan.
• Other Source: Such comprises of interest income, dividends, and every other passive source of revenue.
This is how the taxpayers might lead themselves by understanding as to how each income category would be taxed or not.
Most tax systems allow for deductions, exemptions, and tax credits to reduce taxable income or final tax liability. These provisions provide a vehicle through which people save taxes by exploiting certain conditions. Among the most common ones are as follows:
• Section 80C Deductions: Provident Funds, life insurance, and other schemes provide investment facilities that are eligible to be deducted up to a certain limit under the Indian tax structure.
• House Loan Interest: It is house loan interest which is fully deductible to its full amount extent.
• General Payday Expenses: Salaried employees' general expenditure for which a standard deduction would always cover all such expenses.
• Health Insurance Premiums: Even health insurance premium can be deducted for oneself and family.
Deductions reduce the income tax directly and when tax credits are available, they decrease the final tax liability.