It is important to plan tax-saving investments in advance in order to save on taxes and not end up depositing excess taxes during the tax year.
The end of a year is typically the time when individual taxpayers rush to take a deeper look at various investment avenues with the intent to optimise on their taxes. The India tax law provides a host of investment avenues to bring down the tax liability of taxpayers, subject to conditions.
Some of the investment avenues that may be considered from both tax perspective and at the same time yield reasonable returns or provide insurance coverage are: Unit linked insurance plans (ULIP); Equity linked saving schemes (ELSS); Term deposits/ Post office deposits; National Savings Certificates (NSC); contribution towards Provident Fund (PF); Public Provident Fund (PPF); and Sukanya Samriddhi Yojana (SSY); Life insurance premia (LIP); and annuity plans, among others.
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Apart from the above investments, certain expenses such as tuition fees and principal loan repayment can also be covered for claiming deduction under Section 80C.
The aggregate deduction for the aforementioned investments and expenditure made available under Section 80C, 80CCC and 80CCD(1) of the Income Tax Act, 1961 (The Act) is limited to Rs 150,000.
Source: Financial Express
