The most approved tax savings alternatives are accessible to individuals and Hindu Undivided Limited which is a family compromising of all persons who are lineally pitched by an ancestor under Section 80 C of the Income Tax Act. Within Section 80 C there are various investments and expenses one can assert deductions on up to the limit of Rs 1.5 lakh per year.
The best time to start organizing your tax-savings investment is at the beginning of the financial year while most taxpayers tend to delay till the last quarter of the year and end up making hasty decisions. Instead if one plans at the starting of the year then the investments made can amalgamate and help an individual attain long-term objectives. We do strive to save on taxes while this should be considered as an additional incentive and not as an objective in itself.
Let’s take up an example of how one could maximize their tax savings, a query had been raised by an individual who had been earning around Rs 10 lakh per annum had to pay Rs 25,000 towards the LIC Premium and Rs 50,000 towards the Provident Fund Account and he was keen on maximizing his tax savings. So a particular way of doing that was suggested by an analyst and he was told to start up with a Systematic Investment Plan with Rs 6000 per month towards the Axis Long Term Equity Fund. For any shortfall in the coming year, one could invest the inadequate amount in three monthly deferred payments from the current month. For further savings upon the tax one could put Rs 50,000 in a National Pension System and confess the deductible amount under Section 80 CCD. Even for your own health insurance one can assert on a deductible amount of Rs 25,000 and in case one can also pay for the health insurance of their parents and claim a deductible amount of Rs 25,000 and if their parents do not have health insurance then even an amount of Rs 50,000 can be claimed as a part of other medical expenses such as medication and hospitalization under Section 80 D.