About Tax Saving Schemes
Here is the beginning of the new financial year 2014, and in the next two months, you will be going to file your tax. What if you can save tax from different schemes easily? Here is a quick guide for the different Tax Saving Instruments that help you to save your taxes a lot.
As it is a good saying “Invest in a hurry, regretting in leisure”. Keeping this proverb in mind here are the few schemes that a person can get through all of the schemes:
|Tax Saving Schemes|
|Section 80 C||PPF|
|Life Insurance Premium|
|Section 80 D||Medical Insurance|
|Section 80 E||Education Loan Interest Rate|
|Section 24||Home Loan Amount|
|Section 80 TTA||Savings Account|
|Section 80G||Donations Paid|
Section 80 C: Your EPF( Employee Provident Fund) is the major part of the Section 80 C deduction scheme. A Person gets a maximum deduction of Rs 1 Lakhs per annum.
Here are the few schemes that fall under Section 80 C:
- Public Provident Fund: A person can get a tax free 8.8 % on investment with lock in a period of 15 years. A person can get a maximum deduction of Rs 1 lakhs per year.
- Life Insurance: It is recommended to buy a Term Plan instead of Life Insurance plans. The premiums that you pay for your children, wife, and yourself can get a deduction of 20 % of the actual sum assured on the policy.
- Equity Linked Saving Schemes: This scheme gives you sufficient money and returns that are linked to the market. ELSS Bonds comes up with a lock in a period of 3 years. The dividends that a person earns from these bonds are tax-free.
- Pension Plans: A person can get a maximum deduction of Rs 1 lakhs on Pension Plans under Section 80 CCC.
Medical Insurance (Section 80 D): You can get tax benefits for the premiums paid on the medical Insurance. You can get a claim of Rs 15,000 for the insurance premium, paid for the family members. If you are spending a premium for your parents who are a senior citizen, can go get a deduction of Rs 20,000.
Interest paid on Education Finance (Section 80 E): If you are paying a substantial amount of Education Loan for your children, you are responsible to avail of a tax deduction. This deduction is permitted in the Initial Assessment year or in the year in which you have started paying the interest on the finance.
Home Loan Interest deducted under Section 24: A person can get a total deduction under Rs 1.5 lakhs for the interest given on the Home Loan. If a person has availed a loan for his self-occupied house, he is exempted from paying taxes.
Savings Accounts (Section 80 TTA): If you have an income of Rs 10,000 in your savings account, you will get a tax deduction on it. A deduction of Rs 10,000 is provided for the incomes of different saving accounts altogether in the bank.
Section 80 G (Donations): If you make any donations to a recognized charitable institution, you are liable to get a tax deduction of 50 % and 100 % of the amount paid.