Tax Planning

Every assessee can save a part of the amount of tax being paid by him/her. To save the tax being paid, assessee has to do proper planning of his funds or income.

Following are a few hints to save Tax:

1. Avail the benefit of basic exemption limit of Rs. 1,10,000 [in case of women assessees below 65 years – Rs. 1,45,000 and Senior Citizens – Rs. 1,90,000]. Make maximum family members as assessees, thus to avail basic exemption as aforesaid, in the hands of the members of the family.

2.  Making women or senior citizens as assessees is advantageous due to the higher exemption limit.

3.  Investing in shares of companies and units of Mutual Funds/UTI can save tax as income from them is fully exempt u/s 10(34)/ (35).

4.  By investing in long term saving schemes specified u/s 80C and 80CCC, one can avail deduction from income up to Rs. 1,00,000.

5.  Invest money in notified Government Securities and Schemes, the income from which is totally exempt from Income tax such as: interest credited to the Public Providend Fund (PPF) accounts, tax free bonds of public sector companies like NTPC, NPC, IRFC etc, Post office Savings Bank Account carrying interest @ 3.5% p.a. credited annually.

6.  Gifts given to relatives or received from them are not subject to any tax, neither to the donor nor donee. Gifts from non-relatives should be restricted to Rs. 50,000 in aggregate during a financial year, as the amount exceeding will be taxable.

7.  Also invest in Kisan Vikas Patra, Life insurance schemes, Money Back Policies like Jeevan Akshay, Jeevan Dhara, Jeevan Suraksha, Bima Nivesh Yojana etc.