ZEE Business
ZEE BUSINESS
हिंदी में पढ़ें  हिंदी में पढ़ें
Live TV
Live TV
  • Home
  • LIC IPO
  • Personal Finance
    • PPF
    • Mutual Funds
    • Income tax
    • EPFO
    • Income Tax Calculator
    • Personal Loan Calculator
    • Car Loan Calculator
    • Home Loan Calculator
    • SIP calculator
    • SWP Calculator
    • MF Returns Calculator
    • Lumpsum Calculator
  • India
    • Companies
    • Property
    • Startups
    • Uidai
  • Economy
    • Aviation
  • Tech
    • Mobiles
    • Apps
  • Auto
    • Cars
    • Bikes
  • Markets
    • Commodities
    • Currency
  • Railways
  • World
    • Economy
    • Politics
    • Markets
  • videos
  • photos
  • Bitbns
  • Marksmen 2022
  • More ...
    • VIDEOS
    • PHOTOS
    • MARKSMEN 2022
BREAKING NEWS
  • LIC IPO: At Rs 5.54 lakh cr market cap on BSE, state-run insurer becomes 5th largest company on debut
  • Dalal Street Corner: Metals, broader markets help bulls take control; what should investors do on Wednesday?
  • What makes LIC shares good dividend, long-term play? Experts decode
  • SC extends demolition deadline of Supertech’s twin towers till 28 August
  • Apple AirPods, MagSafe chargers likely to come with USB Type-C port - Check details
Read in App
Business News » Personal Finance News

How to save yourself from paying more taxes?

In order to maximise your savings, first assess your total income, existing investments, tax-deductible expenses, etc. This would help you to calculate your tax liability and the amount you need to invest to reduce the tax outgo.

  • Twitter
  • Facebook
  • Linkedin
  • whatapp
  • View in App
How to save yourself from paying more taxes?
Among the various tax saving options, ELSS funds provide the lowest lock-in of three years compared to the five years lock-in period for PPF or FD. Image source: Pixabay

This Valentine’s Day, it may be sensible to go on a date with your wealth manager, tax advisor or accountant to save taxes. Tax is mandatory but paying higher taxes when you can save tax legitimately is viewed as financial imprudence.

“Paying taxes is important but one should not be paying more than  required,’’ advises Harsh Jain, co-founder & COO, Groww.

In order to maximise your savings, first assess your total income, existing investments, tax-deductible expenses, etc. This would help you to calculate your tax liability and the amount you need to invest to reduce the tax outgo.

“One must avail all the tax deductions and exemptions available under various sections of the tax law. Firstly, look at section 80C, where you can avail tax deduction up to Rs 1.50 lakh per individual assessee and HUF (Hindu Undivided Family),’’ says Amar Pandit, founder & chief happiness officer, HappynessFactory.

The options to avail deduction of up to Rs 1.50 lakh include tuition fees for children, contribution to EPF or VPF (applicable to corporate executives), life insurance or pension plan premiums (single premium policies are not eligible for 80C, principal portion of equated monthly installment (EMI) of home loan and stamp duty, registration charges if house is bought in the financial year.

If Rs 1.50 lakh limit is still not exhausted, one can choose to invest in Equity Linked Security Schemes (ELSS), Public Provident Fund (PPF), tax-saving fixed deposits (FD), Sukanya Samridhi Yojana (SSY), Senior Citizen Saving Scheme (SCSS), National Saving Scheme (NSC).

“The National Pension Scheme also qualifies for investment under section 80C. However, due to the complexity and long lock-in period, we do not recommend one to opt for it even if there is an additional benefit of investing Rs 50,000 in the same,’’ says Pandit.

Among the various tax saving options, ELSS funds provide the lowest lock-in of three years compared to the five years lock-in period for PPF or FD.

“It has been seen that the lock-in of three years is beneficial to investors as it curbs the tendency to churn and they get the benefit of staying invested for a longer period,’’ says Ashwin Patni, head, products and fund manager, Axis AMC.

In recent years, the popularity of equity as an asset class has increased greatly. “ELSS funds provide twin benefits of tax savings and growth. We have seen an increase in the number of investors who have opted for ELSS funds in last three to four years,’’ Patni adds.

Investors with a low-risk appetite can opt for PPF, tax saving FDs, SSY, NSC, and traditional life insurance policies.

“These investment options generate a relatively low return and come with a longer lock-in period but are popular among risk-averse investors due to secured returns,’’ says Adhil Shetty, CEO and co-founder, Bankbazaar.

“Ulips (unit-linked insurance plans) offer exposure to equities too with the funds parked in both insurance and the stock market. However, they come with a lock-in period relatively longer than the ELSS,’’ Shetty added.

In addition to Rs 1.50 lakh relief available for investments under section 80C, there are other deductions also that one should look at. Home loan interest deduction up to Rs 2 lakh per annum under section 24, medical insurance premium paid up to Rs 25,000 (for self, spouse and children) and additional Rs 25,000 for parents (the limit is Rs 30,000 for senior citizens) and the interest paid on education loan taken for higher education for oneself, spouse or children is fully tax-deductible under section 80E.

“Each tax-planning instrument has a different underlying objective, and risk associated with it, which needs to be understood before investing,’’ says Pandit.

Savvy investors ensure that their investments are in sync with their investment goals and also help to pare taxes. “Decide on the product (ELSS, PF, etc) you want to invest in based on the risk-return appetite you have,’’ says Jain.

However, investing alone is not enough. You also need to submit the proof of investments to your office or the chartered accountant to ensure that tax benefits are reflected at the time of filing of tax returns.

“One should not wait until the last minute to make investments as it could lead to paying extra taxes,’’ points out Jain.

Even if the tax saving investments are not factored in for any reason, fear not. “All you need to do is to highlight your investments when filing your tax returns and claim a refund for any excess tax paid,’’ Patni added.

Source: DNA Money

Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.

TAGS:
Valentine’s DayEquity Linked Security SchemesNational Saving SchemeSukanya Samridhi YojanaFixed Deposits
Written By: ZeeBiz WebTeam
Updated: Wed, Feb 14, 2018
10:12 am
ZeeBiz WebDesk

LATEST NEWS

Q4 Results 2022; IOC, Dr Lal Path Labs, Bajaj Electricals, IRB Infra declare March quarter results; here are key highlights, dividend details

LIC IPO: At Rs 5.54 lakh cr market cap on BSE, state-run insurer becomes 5th largest company on debut

World Hypertension Day: High blood pressure can be controlled; bring these changes in your lifestyle

Stock Market Update: Sensex, Nifty50 surge nearly 2% as LIC shares make debut on exchanges - Here's what's fuelling the rally

Dalal Street Corner: Metal index, broader markets help bulls take control as benchmarks extend gains for 2nd day; what should investors do on Wednesday?

RBI rejects applications of Sachin Bansal-backed firm, 5 others for setting up banks

India's April WPI inflation accelerates to 15.08% YoY, in double-digits for 13th consecutive months

Elon Musk hints paying less for Twitter as he fights with Parag Agrawal over bots

Buy, Sell or Hold—What should investors do with Poonawalla Fincorp, Nazara Technologies and Hatsun Agro Products?

India central bank sold $20.1 billion in March to defend rupee - RBI bulletin

  • India News
  • World News
  • Companies News
  • Market News
  • Personal Finance News
  • Technology News
  • Automobile News
  • Small Business News
  • Income Tax Calculator
  • Live TV
  • Videos
  • Photos
  • Author
  • Rss Feed
  • Advertise with us
  • Privacy Policy
  • Legal Disclaimer

Latest Trending Updates

  • EPFO
  • Budget 2020
  • Income Tax Return
  • Auto Expo 2020
  • Home Loan
  • Business News

Trending Topics

  • Income Tax
  • income Tax Calculator
  • 7th Pay Commission
  • Reserve Bank of India
  • GST
  • Latest Business News

Follow us on

zeebiz
zeebiz

Partner Sites

  • Zee News
  • Hindi News
  • Marathi News
  • Bengali News
  • Tamil News
  • Malayalam News
  • Gujarati News
  • Telugu News
  • Kannada News
  • DNA
  • WION
© 2022. India Dot Com Private Limited. All Rights Reserved.
LIVE TV