Utilize Your Money With Efficient Tax Planning Options Article

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Utilize Your Money With Efficient Tax Planning Options

The tax planning and Investment options under Section 80C and 80D is very popular among the Indian masses as it encourages to have monthly savings from their monthly income. Section 80C and 80D has many benefits for your personal tax planning.

Author: Aditi Malhotra

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One of the prime concerns of the salaried and corporates is the taxation procedure. However, one cannot completely avoid this liability, through several deductions and exemption policies by the Indian Income Tax Act or the Section 80C or 80D can help you to lessen the taxable amount and carry on with some savings. One must take its full advantage if the taxable amount is in the highest bracket, which can help you to reduce taxable amount by Rs. 1 lakh. It means that the savings can go up to Rs. 33, 0000 according to the provisions of section 80C.

For the financial year of 2009-2010, A maximum deduction of Rs. 1 lakh has been allowed by section 80C from your taxable amount which can be invested in any of the following:-

Life insurance premium- Under section 80C, any investment with Life insurance policy is eligible for income tax deduction. This also includes the premiums paid for your spouse or children. In case if both the spouses are having LIC policies and the spouse’s income is in the lowest slab, then by showing both the LIC premium, you can get more benefit of deduction under this section.

Any amount made to Provident Fund is deductible from the taxable income as per section 80C. Generally, it is deducted at the beginning of a month and is automatically cut from the salary of an individual. By opening a PPF account in any of the leading banks, you can save the taxable amount. The minimum amount is Rs. 500 and the maximum is Rs. 70,000.

Fixed deposits, National saving certificate- Any amount invested in fixed deposits for a term period greater or equal to 5 years is eligible for tax exemption as per section 80C. This is one of the most risk free investments as per some tax consultants.

Mutual fund investments in ELSS- Some mutual funds are known as Equity Linked Savings Schemes or ELSS, which are eligible for tax exemption under section 80C. Although a certain kind of mutual funds are eligible under section 80C. These tax saving mutual funds have a lock-in period of about 3 years with something like ‘tax saving’ with their name. So it is advisable to consult a tax consultant in order to make sure whether the mutual fund is an ELSS or not.

These are some of the most popular form of tax savings options. Other options also include the property tax and other insurance schemes.

About Author

Myself Aditi Malhotra from New Delhi, India looking forward for exploring and writing articles, blogs on new topics. You can find more information about investment, finance and tax paying on above article.

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