Planning for tax is a daunting task that has to be carried out carefully, which calls for crafting decisions in regard to the prospective financial year. In fact, it is highly necessary to adhere to the respective plans and strategies. In order to venture into tax saving, a person is required to take care of certain aspects.
- Do Checkout Section 80C:
In the matter of taxation concerned with employees, section 80C is known to be the biggest ally of employees. So, this mandates for working people to grab thorough knowledge of section 80C for maximizing their salary and curb on tax pay outs. In fact, it assists employees with lesser tax liability. For the employees having annual salary of INR 1.5 Lakh or less will be benefitted from tax.
- Initiating with INR 1.5 Lakh:
With 1.5 Lakh as a starting point, consider viable investment options such as Public Provident Fund, Insurance, mutual funds, and even national saving certificate. Here, taking guidance from a professional financial planner should be helpful with well-planned financial goals, income levels and risk profile.
- Understand the Important Options:
At the time of glancing over section 80C, it is essential that the person should check over options that are not saved from the taxation bracket that might include Employees provident fund or even life insurance. On coming across essential options, it is also necessary for the tax saver to look for mutual funds offering tax benefits, unit linked insurance plans and also new pension scheme.
- Home Loaners can Enjoy Tax Saving:
The people having availed home loans stand the eligibility to claim tax benefits as per Section 80C by providing respective proves like principal re-payment on the home loan. Along with this, tax benefits can also be availed under Section 24 in regard to the payment of interest on the home loan.
Documentation Required for Availing Tax Benefit:
Along with gazing on the information presented in Section 24 and Section 80, it is necessary for the employees to provide specified documents for enjoying tax benefits on their earnings. This may include Rent Receipt for HRA (House Rent Allowance) tax benefit, Medical Bills to get tax-free medical allowance, proof of travel for claiming Leave Travel Allowance, proof of conveyance for the Conveyance Allowance, proof of insurance premium paid for tax benefit, state of education loan for tax benefit under Section 80E and proof of donation made for tax benefit as per Section 80G. By keeping a track of the varied tax benefit options, the employees can save on a lot of amount.
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