"The avoidance of taxes is the only intellectual pursuit that carries any reward." Yes, you file income tax returns on time. It’s your duty and you do it diligently. But, have you done tax planning to save on your taxes?
“Tax evasion is a crime. Tax avoidance is not.” If you are losing hard earned money by not doing tax planning, it’s your fault. It’s your duty to study the various tax deductions and exemptions, which help you save tax. What about tax saving investments? Are you paying extra taxes, just because you have not studied tax saving investments?
“A rupee saved is a rupee earned.” Save tax today for a better tomorrow. Want to learn more on tax planning? Just leave a missed call on IndianMoney.com financial education helpline 02261816111 or just post a request on IndianMoney.com website. IndianMoney.com offers Free, Unbiased and on-call financial advice on Insurance, Mutual Funds, Real Estate, Loans, Bank Accounts and capital markets.
Equity linked savings scheme popularly called ELSS, is a type of mutual fund. But unlike other mutual funds, ELSS can save you tax. ELSS invests most of your money in stocks. You get a tax deduction up to INR 1.5 Lakhs a year under Section 80C, on the money you invest in the ELSS.
ELSS has a lock-in of 3 years, which means you cannot touch this money for 3 years.ELSS enjoys EEE benefits which means the money you invest up to INR 1.5 Lakhs a year, the money which grows and the money withdrawn at maturity are tax free.
Health insurance plan is a simple plan, where you pay the Insurer a fixed amount generally once a year, called the premium. You are insured for an amount called sum assured, depending on the premium you pay. Your insurer pays the hospitalization bills, if you are hospitalized for a disease/ailment. You can also cover your entire family under a single health insurance plan, called a family floater health insurance plan.
Yes, availing a health insurance plan does have tax benefits. You get a tax deduction of a maximum of INR 25,000 a year, under Section 80D of the income tax act, on the premium paid for a health insurance plan, for self and family. If you pay the health insurance premiums for your parents who are senior citizens, you get a tax deduction of a maximum of INR 30,000 a year.
Never avail a health insurance plan just to save tax. Avail this plan because it pays hospitalization bills when you/family members are hospitalized. These bills can be very high. You and your family stand protected from financial difficulties.
A tax-saving fixed deposit is just like any fixed deposit, only it gives you tax benefits. Not all fixed deposits offer tax benefits. Only tax-saving fixed deposits provide you this benefit. A tax-saving fixed deposit has a lock-in period of 5 years. You get a tax deduction up to INR 1.5 Lakhs a year, under Section 80C of the income tax act.
Why tax-saving fixed deposit? A tax-saving fixed deposit might offer interest, higher than a normal fixed deposit. Senior citizens get a higher interest on tax-saving fixed deposit.
Public provident fund also called PPF, is a popular investment in India. PPF has a lock in of 15 years. You cannot touch your money for this time period. The money you invest in PPF has tax benefits.You get a tax deduction up to INR 1.5 Lakhs a year, under Section 80C of the income tax act.
The interest you earn and the amount withdrawn at maturity is tax free.The interest rate offered on PPF, is higher than bank fixed deposits, NSC and Post Office deposits. You also get returns higher than inflation.
Wondering how investing to save tax today, helps you enjoy a better tomorrow? Simple…Every rupee you save in tax is invested and earns you more returns. You grow rich soon. Be Wise, Get Rich.
Mr. C S Sudheer is the founder and CEO of IndianMoney.com – India’s largest Financial Education Company. He started his career with ICICI Prudential Life Insurance and later on worked with Howden India. After his brief stint in Howden India, he moved on and incorporated Suvision Holdings Pvt Ltd which is the sole promoter of IndianMoney.com. He aims to build a nation that is financially literate with investment savvy citizens.
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