Whether you are a business person or an employee you need to pay your taxes on time in very accordance with Income tax policies set by the taxation authorities of Government of India. You may however adapt several tax saving schemes to save a considerable amount of money since government has already introduced a number of tax saving options for the citizens of the country. Almost all the financial institutions and private as well as nationalized banks come forward with several lucrative tax saving options for the tax payers every day. Some of the most popular and reliable tax saver mutual funds are:
- HDFC Tax Saver
- Kotak Tax saver
- UTI Equity Tax Saver
- TATA Tax Saver
If experts are to be believed, Section 80 C offers tax payers a maximum of 1, 00,000 tax free income by purchasing a number of tax saving instruments in a given taxation year.
- Life Insurance Premium or ULIP
- Provident Fund (PF) contribution
- Public Provident Fund (PPF)
- Repayment of home loan principal
- Post Office Time Deposits
- Post Office Monthly Income Plan
- Post Office Recurring Deposits
- Equity Linked Savings Schemes
- Infrastructure Bond
- National Savings Certificates (NSC)
- Tax Saving Fixed Deposits with Banks
Let’s take a quick look on the eligibility criterion a tax payer should adhere in order to avail the investment instrument benefits for the tax saving:
- Only individuals or HUF are eligible submitting the tax saving instruments.
- All the investments, contributions and payments of the current financial year are considered.
- Only the income made inside the country is taxable
- Financial limits for every investment instrument should be adhered accordingly for each individual taxpayer.
Below listed are some crucial tips for tax saving you may implement to avail huge tax benefits in the year 2011.
- Don’t dispose of any of the receipts of your business transactions done in recent times. Receipt of any purchase, sale or other transaction detail may allow good tax benefits.
- Avoid sort term capital gains while choosing an investment instrument as you usually pay more on tax than actual gains in these types of investments.
- Always purchase tax free investments from reliable financial institutions for the gain of high-returns investments.
Income tax department of Government of India puts a number of sections accordingly to enable taxpayers to save good amount of tax from their earnings.
- Section 80D for Health Insurance Premium
- Section 80E: Interest paid on educational loans
- Section 80G: Donations to Charitable institutions
- Section 24: Interest paid on housing loan
- Section 10(13A) : House Rent Allowance
