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Tax Planning
Planning your investment in such a way that you get the maximum tax relief is the only way to reduce your tax burden.You can save tax upto Rs 22,120 by investing upto Rs 1,00,000 under various sections of Income Tax Act. To do proper tax planning there are few steps which all of us can do ourselves.
Step 1
Calculate your taxable income from all other sources, as salary/ pension/ interest etc
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Step 2
Calculate Tax payable on gross taxable income for the whole financial year |
Step 3
After you calculate your tax liability invest accordingly in various tax saving schemes as per the need. |
Following are the tax saving provisions to help you make the right decision suiting to your needs :
How to Save Tax and recommended Schemes |
| Under Section of (IT Act) |
Tax Relief |
Investment Schemes |
| 80D |
Deduction upto Rs. 10,000 |
Health Insurance-Mediclaim |
| 54ec |
Saves Capital Gains Tax |
Bonds/NHAI, REC |
| 80CCC |
100% deduction upto Rs. 10,000 |
Jeevan Suraksha, Plan of LIC |
| 80L |
Deduction upto Rs. 12,000* from interest |
Post Office Schemes, Fixed Deposits, Schemes of Housing Finance Companies, Bonds with ICICI etc. Rs. 3000 for investments made in Govt securities. |
| 88 |
*Tax rebate upto Rs. 16,000 |
Schemes of LIC, PPF,EPF,GPF,NSC,NSS,ULIP, Infrastructure Bonds |
 Section 88 of the Income Tax Act, 1961 allows a rebate from Income Tax of up to Rs. 16,000, at 20 per cent of the value of investments made upto Rs. 80,000. Further, this overall limit of Rs. 80,000 is subdivided into two parts i.e., Rs. 60,000 and Rs 20,000.
Specified investment schemes in which tax rebate upto Rs. 12,000 is allowed are premium payments in respect of LIC Policies, contribution to EPF/ GPF/ PPF/NSC/ NSS, UTI's ,ULIP, ELSS upto Rs. 10,000. An additional exclusive tax rebate upto Rs. 4,000 is allowed on investments made in Infrastructure Bonds ICICI or IDBI etc.
Premium paid in respect to Jeevan Suraksha plan of LIC upto Rs. 10,000 per annum is eligible for , deduction from taxable income under section ' 8OCCC ( 1 ) of IT Act, 1961. Also, a deduction upto Rs. 10,000 is allowed in respect of premium paid by cheque towards health insurance policy i.e., Mediclaim policy of GIC u/s 80D of IT Act, 1961.
Another important section of IT Act, 1961 is 80L which allows a deduction upto Rs. 12,000 from interest income arising out of specified investment schemes.
Interest on bank deposits/ IFCI/IDBI/ICICI/IDBI/ICICI Bonds/Fixed Deposits with Housing Finance Companie's like HUDCO, HDFC etc./ Post Office Schemes/NSC etc. qualifies for a deduction upto Rs. 9,000 and an additional exclusive deduction upto Rs. 3,000 is allowed on interest received in respect of central/state government securities.Now go ahead and pick your choice of investments out of eligible schemes to get maximum tax advantage.
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(Source :: indiainfoline)
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