There are a number of ways in which you can save your income tax. The government has made various alleys to help you. If you are a little witty and spend your income in the rightful places, then you can get exemptions at high rates. In general, you can save taxes as per the sections mentioned in the constitution, i.e. by donating to some charitable organizations. There are some other witty measures, they are:
1. Inclusion of allowances in the salary like the medical, housing, travel and food allowances. The tax can be exempted on producing the actual bills paid to these places. For example the lunch coupons get an exemption of Rs. 50 per coupon!
2. Utilize the Section 80 C and invest in life insurances, NSC, fixed deposit certificates in banks and post offices.
3. You can get allowances in the form of exemption up to Rs. 2000 under section 80GG of the Income Tax Act, 1961 if you are staying in a rented accommodation and not getting the HRA.
Likewise there are many more ways. The tax saving does not mean that you are cheating the government by showing wrong and fake data. Tax saving deals with the good distribution of the expenses. The government has made the loop holes to enable the eager one have a good distribution of money. So plan your income and lead a happy life.