March is coming to an end. It’s time to do tax planning in a hurry. Choose tax planning investments for maximum tax efficiency. This is nothing but after tax returns of an investment.
Why tax planning? Well, if you don’t do tax planning, you end up paying more in taxes. A rupee saved in taxes is a rupee earned. Why lose all that hard earned money? Take a look at the last minute tips to save tax.
Want to know more on Tax Planning? We at IndianMoney.com will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice/education to ensure that you are not misguided while buying any kind of financial products.
Certain investments and expenses help save tax. Section 80C is one of the great ways to save tax. This is a collective deduction on certain investments and expenses up to Rs 1.5 Lakhs. The popular investments are ELSS, PPF, 5-Year tax saver FD, NSC, SCSS among others. Home Loan principal repayment and children tuition fees also enjoys Section 80C tax benefit.
ELSS is an excellent investment for aggressive investors and those in the higher tax brackets. If you fall in the 30% tax bracket you can save Rs 46,800 a year (Rs 1.5 Lakhs * 30%) on falling in the higher tax brackets.
See Also: 6 Uncommon Ways to Save Tax
You must avail a health insurance plan to save tax. The premiums paid on health insurance plan for self, spouse, children and parents is tax deductible under Section 80D of the income tax act up to Rs 25,000 a year. It’s Rs 50,000 a year for senior citizens. You enjoy the twin benefits of payment for an emergency hospitalization and tax savings.
The Employees Provident Fund or EPF is a savings scheme under Employees’ Provident Fund and Miscellaneous Act, 1952. You (employee) contribute 12% of basic + dearness allowance. The employer contributes 8.33% towards EPS and 3.67% towards EPF. Your contribution to EPF enjoys Section 80C tax benefit up to Rs 1.5 Lakhs a year. EPF offered 8.65% for Financial Year 2018-19. There are plans to reduce this to 8.5%.
National Pension Scheme or NPS is an excellent way to save tax. The investment enjoys Section 80C tax benefit up to Rs 1.5 Lakhs a year. It also has a 50% allocation to equity which makes it a good investment for aggressive investors. You can claim an additional deduction of up to Rs 50,000 a year under Section 80CCD(1B) which is over and above the Section 80C tax benefit.
The home loan is an excellent way to save tax. Home loan principal repayments enjoy Section 80C tax benefits up to Rs 1.5 Lakhs a year. Home loan interest repayments enjoy Section 24 tax benefits up to Rs 2 Lakhs a year. First time home buyers enjoy an additional tax benefit on home loan interest up to Rs 1.5 Lakhs a year under Section 80EEA.
Take a joint home loan with spouse and save tax.
See Also: Steps to Finalize Tax Saving Instruments
Make a charity or philanthropic contribution and save tax. Some donations get a 100% tax deduction while some others enjoy a 50% tax deduction under Section 80G. Make donations to organizations specified under the Ministry of Finance and save tax.
You May Also Watch
Keep your Financial Cognizance up to date with IndianMoney App. Download NOW for simple tips & solutions for your financial wellbeing.
Have a complaint against any company? IndianMoney.com's complaint portal Iamcheated.com can help you resolve the issue. Just visit IamCheated.com and lodge your complaint. If you want to post a review on any company you can post it on Indianmoney.com review and complaint portal IamCheated.com.
Be Wise, Get Rich.
This is to inform that Suvision Holdings Pvt Ltd ("IndianMoney.com") do not charge any fees/security deposit/advances towards outsourcing any of its activities. All stake holders are cautioned against any such fraud.