Tax relief

Tax relief refers to a variety of mechanisms that reduce the tax a person or business is required to pay. These mechanisms may take the form of deductions, exemptions, tax credits, rebates, preferential rates, or even the postponement of tax payment. Governments typically offer such relief to ease the burden on certain categories of taxpayers or to promote socially beneficial activities, including long-term savings, investment, or charitable contributions. Regardless of the form it takes, tax relief ultimately lowers the taxpayer’s final liability.

Example: When an individual invests ₹1.5 lakh in approved savings instruments under Section 80C, that amount is subtracted from their taxable income. This reduction effectively provides tax relief by decreasing the tax payable.