Year End Tax Planning 2019: As soon as the end of the current financial year approaches. And the HR department at your workplace has asked you to deposit your investment, it is possible. That you are planning tax savings in the last few minutes.
However, it is important not to make any investment decisions in a hurry. Because you can put your money on low-yielding equipment, whose sole purpose is to save in taxes.
Year End Tax Planning For Small Business Owners
At this point, you can start with listing all your investments and evaluate what to do next.
Tax exemption under section 80C has always been the main source of decision making regarding a salaried person’s investment. However, without feeling that you have maximized its benefits or that you do not need to invest anymore. Under the section, you can take an agent to buy more equipment due to persuasion.
Therefore, before proceeding, it is necessary to list all your potential exemptions under Section 80C. In fact, it is possible to extend the limit of your exemption limit to 1.5 lakh under any section without any investment.
Provident Fund: Year End Tax Planning 2019
If you take all your monthly contributions to the PF made in the entire year, then it will be a huge amount. This is one of your biggest involuntary investments. Which is exempt under Section 80C of the IT Act.
If you have children in a school or college, including your preschool, you can deposit their receipt and search for a discount under Section 80C.
Home Loan: Year End Tax Planning 2019
If you are currently paying a loan at the house you purchased, then you can mention the home loan certificate for the EMI payment details. And can claim a deduction on both the interest and the principal paid during the year.
Stamp Duty Or Registration Charges
If you bought a house between April 2018 and now, you can claim a tax rebate or a stamp duty charge on registration.
Life insurance: Year End Tax Planning 2019
You can claim a rebate on the premium paid for life insurance provided that the premium amount does not exceed 10 percent of the sum insured.
After considering all of the above, if your total amount is still not more than 1.5 lakh rupees, then you can get PPF, NSC, NPS, ELSS, Tax Savings Term Deposit (Post Office Or bank), under some section like Sukanya, can consider some investment options. Prosperity Scheme or Senior Citizen Savings Scheme. Investing in NPS (National Pension Scheme), which is partially linked to the market, will give you an option to get an additional tax of Rs. 1.5 lakh plus tax deduction of 50,000 rupees.
You can claim tax on medical insurance premium paid by you under section 80D of the IT Act. If you can claim up to Rs 25,000 on premium paid for medical insurance for yourself, husband or wife and dependent children. An additional deduction of Rs 25,000 for the premium paid on the parents’ medical insurance can also be sought. If the age of the parents is more than 60 years, then this limit has been increased to 50,000 rupees for the current financial year.
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The intention behind investing should not be tax saving only. For example, a traditional insurance product can be costly with its humble returns, so your tax savings efforts become useless.