Individuals want to save taxes but they don’t know how to do it. They are either not aware of ways to save taxes or are too consumed in their day to day life to seriously think about saving taxes. For individuals this is the right time to start thinking about saving taxes, as all individuals are required to submit the tax investment proof by end of January or February. We have noted from our experience that individuals in hurry under stress in the last week of March, invests in some tax saving plans which may not be effective in the long run. Actually, each individual needs to have different tax planning plan based on the income and current investment plan.
Some of tax saving tips, taxpayers should look to employ to lower taxes:
Check 80C Investments > Check whether you are availing full benefit of 80C deduction i.e., deduction Upto Rs. 1, 00,000/-. To avail the said deduction you should invest in LIC premium (in the name of relative, spouse) or invest in Fixed Deposit for 5 years or more or invest in Time Deposit with Post Office for 5 years or more or you can also open a Public Provident fund account and invest Upto Rs. 100,000 in that fund.
Also you can save taxes by saving in equity shares under Rajiv Gandhi Scheme upto Rs. 50,000/- and now interest from bank is exempt upto Rs. 10,000/-.
Tax Exemption of Medical premium u/s 80D > Take medical or health insurance premium for self, spouse or children and claim deductions up to Rs 15,000. In addition to this, additional deduction of Rs.15000 (20000 in case of senior citizen) can be claimed if medical insurance premium is paid for dependant parents. Now upto Rs. 5000/- for health check up is also included under this.
Pay last installment of advance tax > Compute your proper income tax on your earned income and pay your advance tax within the due date 15th March to avoid any interest liability. If advance tax is not paid in full, interest will be leviable.
Plan and Divide your income > You can lower the incidence of income tax by means of legal transfer of the sources of income among family members, so that each of the family members enjoys the basic personal income tax exemption limit. Tax liability will reduce if you will spread income among different members of the family.
Collate all documents and certificates of investment for FY 2012-13 > Obtain all documents, receipts and certificates of the investments made whose deductions has to be claimed. For example, if you are claiming home loan deduction you should collect the certificate of repayment of principal amount and interest paid during the financial year.
Capital gain details if any > If you have sold/transferred or planning to sold/transfer any asset like house property, shares, mutual funds etc. during the financial year then compute the capital gains and check investments available to claim exemptions of the tax on capital gain and accordingly make investments. A distinction is to be made between long term and short term capital gains to reduce tax on capital gains.
Some of tax saving tips, taxpayers should look to employ to lower taxes:
Check 80C Investments > Check whether you are availing full benefit of 80C deduction i.e., deduction Upto Rs. 1, 00,000/-. To avail the said deduction you should invest in LIC premium (in the name of relative, spouse) or invest in Fixed Deposit for 5 years or more or invest in Time Deposit with Post Office for 5 years or more or you can also open a Public Provident fund account and invest Upto Rs. 100,000 in that fund.
Also you can save taxes by saving in equity shares under Rajiv Gandhi Scheme upto Rs. 50,000/- and now interest from bank is exempt upto Rs. 10,000/-.
Tax Exemption of Medical premium u/s 80D > Take medical or health insurance premium for self, spouse or children and claim deductions up to Rs 15,000. In addition to this, additional deduction of Rs.15000 (20000 in case of senior citizen) can be claimed if medical insurance premium is paid for dependant parents. Now upto Rs. 5000/- for health check up is also included under this.
Pay last installment of advance tax > Compute your proper income tax on your earned income and pay your advance tax within the due date 15th March to avoid any interest liability. If advance tax is not paid in full, interest will be leviable.
Plan and Divide your income > You can lower the incidence of income tax by means of legal transfer of the sources of income among family members, so that each of the family members enjoys the basic personal income tax exemption limit. Tax liability will reduce if you will spread income among different members of the family.
Collate all documents and certificates of investment for FY 2012-13 > Obtain all documents, receipts and certificates of the investments made whose deductions has to be claimed. For example, if you are claiming home loan deduction you should collect the certificate of repayment of principal amount and interest paid during the financial year.
Capital gain details if any > If you have sold/transferred or planning to sold/transfer any asset like house property, shares, mutual funds etc. during the financial year then compute the capital gains and check investments available to claim exemptions of the tax on capital gain and accordingly make investments. A distinction is to be made between long term and short term capital gains to reduce tax on capital gains.
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