Tax Saving/Planning Tips
Planning your taxes means planning your investments in such a way so as
to avail maximum possible tax benefits. To save taxes invest wisely.
that you have availed entire limit of Rs. 150000 under Section
80C. Tax deduction under section 80C
investment in PPF, NSC, Life Insurance Premium, Equity Linked Savings
Schemes (ELSS),House Loan Repayment, tution fee of two children etc.
Tax Implications on individuals of Budget-2016
- Best option is to own a house
case both husband and wife are taxpayer, better option is to purchase
house in joint names with joint loan. This will result in tax
benefit to both for principal repayment and Interest ( Rs. 2.00 Lac).
other words both the owners will get deduction of Rs. 2.00 Lac for
interest i.e. total Rs. 4 lacs in case of self occupied
- Click here to
know more about benefits of investing in a house property
- Remember any tax benefits in case of house
property are available only after getting the possesion/completion of
our view all tax payers must have Public Provident Fund (PPF)
Account. PPF Account can be opned with SBI, ICICI Bank, few other banks
and Post Office. Better option is to open your PPF Account with SBI or
ICICI as it is more convenient and you can deposit money online in case
you have Savings Bank Account with SBI as well. Benifits of PPF Account
- Minimum contribution of Rs. 500 has to be
made each year.
upto Rs. 1.50 Lac can be contributed each year(Maximum limit of Rs.
1.50 lacs is increased from the financial year 2014-15, earlier this
limit was Rs. 1.00 lacs)
can contribute 12 times during a year with minimum contribution of Rs.
500 at a time. This gives flexibility to save money as and when
- Period of PPF Account is 15 years which can
be extended for further period of 5 years at a time.
Free Interest rate @ 8.7% p.a. . In case you are falling under 30%
Income Tax Slab your gross return is equivalent to appx. 12.5% p.a
- Click here to know more about Public
- Equity Linked Saving Schemes (ELSS)
is also a good option specially for young tax payers as it fetches good
return in longer period. Saving in ELSS can be done through lump sum
investment or through Syatematic Investment Plans (SIP).
- Click here to know more about
- NSCs were
very popular tax saving instruments in past but in our view
not a very good choice for tax savings as there are many other better
saving options. NSC Interest is taxable however interest is reinvested
in units and hence interest is also available as deduction under
- Click here to know more
fee of two children is allowed as deduction under Section 80C.
Only tution fee for full time education of two children is allowed.
Tution fee will not include development fee, donation or private tution
- To promote savings for retirement, an additional deduction of Rs.
50000 has been introduced from financial year 2015-16 for investments
in National Pension Scheme(NPS). This deduction of Rs. 50000 is
introduced by Finance Act 2015 U/s 80CCD(1B) and is in addition to the
above said deduction of Rs. 150000 u/s 80C.
- Read in detail about investing in NPS and Section 80CCD(1B)
promote health care and motivate people for medical insurance, Govt has
provided deduction under Section
80D of maximum Rs 15,000 (Rs.
20,000 in case of senior citizen) for medical insurance paid by any
mode other than cash. Medical insurance can be paid for self, spouse
and depedent children. Additional deduction of Rs. 15000 ( Rs. 20,000
in case of senior citizen) is allowed for medical insurance paid for
Financial Year 2012-13 you can also claim Rs. 5000 spent on preventive
medical check up within overall limit of Rs. 15000.
- Read in detail about Section 80D
- This deduction of Section 80D is in addition to
Rs. 150000 deduction of Section 80C.
- A Deduction U/s 80DDB is also there for expenses incurred on medical
treatment of certain specified disease on self or dependent.
- Read in detail about Section 80DDB
- There is a deduction U/s 80E of the Income Tax Act to promote
higher education. The interest on loan taken for higher education of
self, spouse or children is eligible for deduction u/s 80E.
- Read in detail about Section 80E
you are not in receipt of HRA, there is a tax relief provision
rent paid under Section 80GG, which is known to very few
- Read in
detail about Section 80GG
- Further there is Income Tax Deductions to Differently
abled persons U/s 80U & for maintenance of differently abled
dependents u/s 80DD. Read in detail about the Income Tax benefits
is a brief discussion about possible tax saving avenues and the maximum
possible deduction available from them. Aquaint yourself well about all
these and then decide as per your priorities.
Some Quick Links
How to Donate to Prime Minister Relief Fund
Missed the deadline? file a belated return
Mistakes in original return; you may revise your return
gifts in India
on property purchase
TDS by Form 15G and Form 15H