There income tax slabs in India is categorised on the basis of income, the source of income and other factors. This means, if your income increases from year to year, you may find yourself paying more tax. As your income increases, you will be pushed into a higher tax bracket.

However, the good news is that if you do your tax planning in advance, you can save a lot using tax-relief and deductions provided by the Income Tax department.

Here are some of the ways that you can consider to

1. Invest in retirement plans

Start investing money into traditional pension funds or other retirement plans. It will not only generate wealth for your post-retirement but you can also reduce your taxes when you contribute to the pension funds. You can claim deductions under Section 80C / 80CCC / 80CCD(1) / 80CCD(1B) / 80CCD(2) of Income Tax Act.

2. Medical insurance & preventive health check-up

The income tax department allows you to gain some tax relief if you spend money on medical insurance and preventive health check-ups. Taxpayers can claim deduction up to Rs 60,000 under section 80D of the Income Tax Act. However, note that the payment of premiums for such expenses should not be made in cash.

3. House Rent Allowance (HRA) Deduction

The salaried taxpayers can claim an income tax deduction against House Rent Allowance (HRA). Even those taxpayers who don't get HRA in their salary can claim tax benefit as per the provisions of section 80GG of Income Tax Act.

4. Repayment of home loan/education loan

The Income Tax Department allows taxpayers to claim tax benefit on both principal & interest components of the home loan installments. These tax deductions are covered under section 24, section 80C and section 80EE of Income Tax Act. Just like home loan, the taxpayers can also claim tax benefit on education loan. The tax deduction for interest paid on education loan is covered under section 80E of Income Tax Act.

5. Sukanya Samriddhi Scheme

Sukanya Samriddhi Scheme is one of the best

schemes and is available for tax deduction under section 80C of Income Tax Act. This scheme also offers a higher rate of return on investment as compared to PF & PPF. The tax benefit for investment in Sukanya Samriddhi Scheme can be claimed only by parents or guardians of a girl child.