Tips to save money on tax filing in FY 2018-19
Three months left for tax filing and if you haven’t planned your investment yet then you might end up paying more taxes.
Start saving more money on income tax by doing some investments in the house, health, life insurance etc. And this investment options are not only for the purpose to save money but also help you to lead a healthier & safe living.
Income tax laws are a little bit complicated and not easy to understand for a taxpayer. As a taxpayer, you should understand each & every exemption and deduction of income tax. As an individual, you must be trying to find better investment options which will help you save money on tax and generating tax-free income. There are various tools available that will help an employee to do smart investments and save money on tax filing.
Let’s dig out some workable tips to help save more money:
Start Early Saving
Start early saving by investing money on fixed deposits or recurring deposit. Also, go for life insurance. This saving plan will give you maximum return with low risk. Higher the amount, higher the risk. You may show your fixed deposit, pension scheme & other investment and loans to deduct your income tax.
Never forget term Insurance
Saving is the first & foremost trick or tip that comes to mind when we think of to do any investment. So start early saving. Start talking to insurance companies and go for a long term investment as it will give you a high return. Insurance will give you a guaranteed return & regular income. This will also help to lead a stress-free life after retirement. Be it a short-term or long-term, don’t think twice and go for it.
- Under section 80C of Income Tax, a person needs to do Rs.1.5 lakh investment to reduce taxable income. A taxpayer can invest in PPF, NSC, ELSS, NPS, Sukanya Samridhi Scheme & five-year post office deposits
- Under section 80D you should do investment in health care in order to claim deductions up to Rs.25000
- Under section 80E taxpayer can claim deduction up to Rs.50000 on Home loan EMIs
Investments under Section 80C
SchemeDurationROIInvest on National Pension SchemeUp to retirement8% – 10%Invest on Public Provident Fund
15 years7% – 8%Long term bank deposit
5 Years6% – 7%National Savings Certificate5 Years7% – 8%ELSS3 Years15% – 18%
Health insurance is a smart investment plan. Just like life insurance health insurance worked as the best tax saving scheme. Health insurance not only renders health or medical benefits but also helps in lowering taxpaying amount. Under the health scheme, the tax deduction maximum limit is up to Rs.25000.
Investment in Public Provident Fund
A public provident scheme is the traditional however the best money saving scheme. Govt. of India provides a higher rate of interest on PPF same as the rate in fixed deposits. This saving scheme will help salaried employees to get huge money at the maturity. Through this investment scheme, a taxpayer would be able to claim deductions up to Rs. 150000 under section 80C. Isn’t a huge deduction amount?
ELSS is one type of mutual fund scheme or say equity linked saving scheme. Govt. of India provides a rebate up to Rs. 150000 from taxable income under section 80C. ELSS funds are totally tax-free. Also, there will be no interest on maturity amount.
In the market, you would find plenty of mutual funds but you should choose wisely. Always do comparisons of mutual funds then go for the best one that fits your requirement. While choosing the fund, never forget the risk factor.
Sukanya Samriddhi Yojana
Sukanya Samridhi Yojana, as the name, suggests its a scheme to protect girl child. This scheme is a part of “Beti Bachao Beti Padhao” campaign. It’s a small deposit scheme however it provides the maximum non-taxable returns. This scheme helps parents of the female child to
This account can be opened after the birth of a girl child till she turns 10 years.
These are some ways to save money on income tax filing. However, these are not the only ways. The main motto is to save money, so if there is any other option available then you should go for it.