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The financial year ends in next few days; by this time there is clarity on how to file Income Tax Returns. However, still there is a hope on Tax exemptions. Now this is the time we need to cross check our calculations on Tax once again.
To ensure maximum tax free earnings, we need to explore different ways to reduce the tax payments and have more benefits in every financial year. For this, the submission buzz starts among the tax payers after January only. While everyone waits till the end of submission date, in a hurry most people go to the financial plans which are not relevant to their financial needs. This is the time where we need to check subscribed fund schemes for that particular year to validate the maturity and income benefits of the schemes, hence, ensure to check your subscriptions before filing your returns.
Thus you will have clear mind on how to start the new financial year from the beginning.
Salaried people as of now they might have submitted the proof of income from different schemes to the Company Management for tax calculations, before you do this you should cross check each and every scheme is important. For to claim reimbursement on various expenses you made during the financial year, you need to keep ready to submit the Rent receipts for House Rent Allowance (HRA) received, Leave Travel Allowance (LTA) receipts from your Holiday trips and Medical Bills, Uniform Allowances, Car / Transportation bills, Telephone bills, Books and stationery expenses etc., or else you may lose the opportunity to claim the reimbursement on certain bills and you may attract the Tax at the base. So, now you have the chance to file your returns on income and claim for refunds if any.
Keeping an Eye on your Expenses:
Essential expenses like Children Tuition Fee, Life Insurance, Health Insurance premiums, Principal & Interest on Home Loan, Interest on Education loan, some of the medical expenses for chronic diseases treatment, exemptions for Physically disabled and Expenses on Lab Tests etc., were eligible for exemption under tax. To get more benefits and reduce levy of tax on your earnings, you need to keep an eye on the above mentioned expenses. In some cases, you may not get HRA while you are employed/working there you have a cushion under Section 80GG you may claim exemption upto Rs.60,000/- on House Rent, this will be applicable to even Self-employed or Business People. As discussed every avenue is fulfilled however, still feels have cushion for more investment you may go for various investment schemes available in the market.
In general most of the people only see the Life Insurance as a Tax Saving avenue, keeping this trend in mind the insurance companies also push different new policies to attract the Tax payers. In this juncture, it is not advisable to buy any Policy merely for Tax Saving purpose without analysing the Pros and Cons, which is always not right. Tax Saving on Conventional Insurance Policies are troublesome in financial view point. Most importantly, Tax Saving might be the additional source only and it will not become main source in choosing the Policy. You need to analyse the insurance requirement from the Policy. Choose the Policy which gives more protection on minimum premium payout, give priority to Term Policy. Find Policies, with which many schemes are available in the market to reduce the Tax burden. Here you need to remember one thing whatever Policy, you choose before 31st March only considered for the current financial year.
Target and Reach Your Goal :
At the end, any Investment scheme you target should yield your financial goals. Ensure, your scheme gives a chance of being long term investment at the same time it helps in Tax Saving. But keep remember what, one thing which investing is only not the criteria also if there is a Tax Saving on the profit on maturity is more beneficial to a tax payer. So, keep all these things in mind while selecting a policy.
Public Provident Fund (PPF) : This scheme allows you to invest for a long term period of 15 years at the convenient intervals. You can invest at a maximum of Rs.1,50,000/- per each financial year.
Sukanya Samrudhi Yojana (SSY) : Children with the age below 10 years are eligible to enroll to this scheme to invest. A maximum investment of Rs.1,50,000/- can be done per each financial year.
These two are last minute investment schemes for whom they do not have time to find a right scheme at the end of the year. The profits earned from these schemes were considered free of Tax. It’s easy to Enroll or open account under these schemes from any of the Nationalised Bank or Post Office.
This scheme also facilitates Tax Saving. However, Single time large investment to this scheme is not safe since these are purely linked to share market as it is volatile in nature and prone to losses. Hence, it is best advisable to invest in small amounts more times beginning from the financial year. You can invest a maximum amount however as per the rule of Section 80C the Tax Saving will be permitted to a maximum investment of Rs.1,50,000/-. In this scheme you can carry the investment plan upto 3 years and it is the only Short Term Investment Plan among Tax Saving Plans. Above all these things there is an ample chance of increased profits with the investment and no Tax on profit incomes (Profit of Rs.1,00,000/- above on the Long Term Investment Plans will attract Tax) after maturity are the benefits with these schemes. It is easy to enroll into these schemes while visiting nearest Banks or Stock Brokerage companies. You can also get in touch with Mutual Fund Advisers to opt these schemes.
If you want to Invest over and above Section 80C permits you have another choice of investment plan under National Pension Scheme, under this maximum limit of investment is Rs.50,000/- and save Tax. If you have small amounts of money try investing in this scheme.
To Save Tax still you have a chance. Let us assume you do not have more money in your hands then the Schemes which fall under Section 80C are National Savings Certificate (NSC), 5 Years Banks Fixed Deposits, Post-office Term Deposits can be considered for Investments. You can also refer Government Bonds and Adult Savings Schemes for Tax Saving purpose. The profits received from this type of schemes can be shown under Personal Income and Tax assessment can be done as per the concerned slabs.
Some donate to Prime Ministers, Chief Ministers Welfare Relief Funds and Non-profit Social Service Organisations, Registered & Notified Political Parties, Science & Technical Research Organisations, which are considered under Section 80G, 80GGA, 80GGC Tax Slabs. Here,the cash donations are limited upto Rs.2000/- only. Keep the donation payment receipts till you file the returns and claim Tax Exemptions. Few Managements take on account of these donations at basic income calculations of their employees.
Remember basic things while you file Tax Returns:
Now, you have only not more than a week, you need to keep money ready and investing in the right scheme such things should be planned immediately.