Most of us would spend time and think to save the tax only during the last 3 months. There are people who would end up bad investment plans to save tax as they plan things out in hurry during the last months. To avoid these negatives it is better to plan on your tax from the beginning itself.
How to Save Your Tax?
During the current financial year, do calculate how much are you spending on provident fund, children’s educational expenses, house loan’s repayment on principle amount (if you had taken housing loan), total amount that you are paying for insurance premium etc. If additions of all these goes beyond Rs. 1,00,000 then you don’t have to think about any new investment. If all the above expenses are within the amount of Rs. 1,00,000 then you can invest the remaining amount in an useful way and here are the plans.
Investing your money in voluntary PF is the best option. You will have tax exemption at three stages – first is for the money that you invest in this Voluntary PF, second the income that you get out of this investment and third is the maturity amount. If you are ready for minimum risk but expecting a low lock in period, then you can go for share market related mutual fund – ELSS plans are appropriate.
Self-employed and business doing people can save in PPF accounts for your future expenses. For this now the interest rate is 8.8% and the tax exemption investment level has been raised to Rs. 1,00,000 from Rs. 70,000. Senior citizens can invest in the tax savings plans at post office.
While tax planning, what are the important points to be considered? Here are those lists of points –
If you notice the above lists of points carefully and follow them you can pay tax without any hassle or problem. It is every citizen’s responsibility to pay tax. Make your tax planning today itself.