Year-end tax planning: How to make the most of the tax deductions available? Here are 5 ways
income tax planning. From the start of January, the Finance Department of many companies starts sending reminders to employees for submission of investment proofs to avoid tax deductions from salary. Let us look at some ways of maximising the benefits of available tax deductions.
Section 80C of the Income Tax Act allows you a deduction from taxable income in respect of certain investments and expenses. Some of these include: a) Life insurance premium paid for self, spouse, and children b) Employee Provident Fund (EPF) c) Public Provident Fund (PPF) d) 5-year Tax Saving Fixed Deposit with a bank or post office e) National Savings Certificate (NSC) f) Equity Linked Savings Scheme (ELSS) g) National Pension Scheme (NPS) h) Sukanya Samriddhi Account (SSA) i) Senior Citizen Savings Scheme (SCSS) j) Home loan principal repayment k) Stamp duty, registration fee, and some other specified expenses paid towards the purchase of a house property l) Tuition fees paid to an education institution in India for the full-time education of any two children. The maximum deduction allowed in a financial year is the amount invested or Rs.
1,50,000, whichever is lower. The deduction under Section 80C can be availed by an individual and a Hindu Undivided Family (HUF). Section 80D allows you a deduction from taxable income for premium paid towards health insurance as follows.
a) You can claim a deduction for health insurance premium paid for self, spouse, and dependent children. The maximum deduction allowed in a financial year is the premium paid or Rs. 25,000, whichever is lower.
If you or your spouse is a senior citizen, the maximum deduction allowed is Rs. 50,000. b) You can claim a separate deduction for health insurance premium paid for
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