“AS FINANCIAL YEAR IS NEAR TO END, WE BRING SOME SMART STRATEGIES TO SAVE TAX FOR YOU ”
India is a country where avenue of earning for salaried person is limited, Therefore it is most important for him/her to exercise the tax saving option and get the most out of it.
Consider this as a game and lets play.We can win the game by doing proper planning and preparation.
If you’re a taxpayer working for an organization that asks for investment proofs, failing which it goes ahead and deducts your tax dues at source, you’ve got less than two months to work out your tax-saving plan.
But Don’t worry we are here to help.
This year’s Budget has introduced some new tax benefits for individual income tax payers.
- You can now avail a separate tax deduction of Rs.50000 for the National Pension System (NPS) over and above the Section 80C limit of 1.5 lakh.
- The Sukanya Samriddhi Scheme, launched last year is also now eligible for the section 80C deduction.
If Employer allows, Employee can get his salary restructured from employer to avail various Exemptions for following salary heads which can be easily configured in factoHR HRMS and Payroll Solution :
- HRA( House Rent Allowance)
- LTA ( Leave Travel Allowance)
- Medical Reimbursement
- Telephone Reimbursement
- Uniform Allowance
- Children Education Allowance
- Conveyance Allowance
Aniruddh Nagodra Co-Founder & CEO, Version Systems Pvt Ltd, says, “If salary is structured well, tax payer will need to pay “ZERO TAX” even if his/her gross salary is 6,50,000/- In case of Employer/Employee is not aware about how they should do this, they can take the help of factoHR HRMS Online Payroll Solution or write to factoHR team at email@example.com, he adds”. Addition to Rs. 1,50,000 under section 80C and 50,000 under section 80CCD(B) for NPS, Rs. 2,00,000 interest on home loan is also deductible under section 24 which in total helps to reduce taxable income of Rs. 4,00,000.
Here are some tips to do smart tax planing
- Plan your investment with long term view so that your financial goal also being met alongwith your tax goals.
- Please check for Lock-In period and reversal of tax benefits in case of early withdrawal.
- Please consider if any TDS is deducted at source while planning tax.
- Investment in Debt Market Mutual Fund is better than FD in bank, as former can be considered for short term or long term capital gain which is maximum 20%, while later is considered directly for tax bracket which may go up to 30%.
SOME OF THE MOST POPULAR TAX SAVING OPTIONS AVAILABLE IN MARKET UNDER SECTION 80C
The most attractive feature of ELSS funds is that it has the shortest lock-in period among all tax-saving instruments under Section 80C – just three years. But Niraj ?Karelia Co-Founder, Version Systems says that “this should not be the only reason for investing in this avenue.”ELSS funds are known to generate good returns over the long run. Besides, the minimum investment is low, the same as a PPF fund (Rs 500/-), another attractive feature of non-committal investor looking to just save taxes is that, unlike a pension plan or a Ulip or an insurance policy, you are under no compulsion to continue investing in subsequent years. Unlike FDs Interest, dividends and long term capital gain on ELSS are also tax-free. Since it gives to option to invest through lumpsum or SIP mode “to make the most out of ELSS funds, divide your investments over a period through SIP instead of putting a large sum at one go,” says Niraj Karelia This reduces risk and effects of volatility.
TAX-SAVING FIXED DEPOSITS (FDs)
SUKANYA SAMRIDDHI SCHEME
ULIP- UNIT LINKED INSURANCE PLAN
SAVE TAX DEDUCTIONS ON YOUR BONUS
Furthermore, your bonus amount from the employer can also be beneficial for your tax exemption. But it would help if you kept a few things in mind:
- Produce your investment details early enough to prevent your employer from deducting liable tax on a bonus before handing it.
- And, If under any conditions, employer anticipates that tax rates may come down for the upcoming year, request the employer to push your bonus up to that following year.