Tax-saving products offer quick returns in respect of taxes saved in the year of investment, which acts as top motivators for saving for the near future. The higher the tax bracket, the bigger would be the gain.
However, as investment deadline comes closer, tax-payers are swift enough to assemble all their investments and ascertain saving the maximum feasible of their income tax. Although, choosing the most suitable tax-saving investment option is a tough task, and it should be done cautiously, the Financial Express reported.
Also, the presence of several savings and investment options makes it more difficult, and it leads the taxpayers to select a wrong product.
Prashant Sharma, Chief Investment Officer, Aviva Life Insurance, shared with the Financial Express five last minute tax-saving tips to help you maximize the best out of the savings on your income.
1. Utilize Section 80C: Under section 80C of the Income Tax Act, you can make investments of the total amount using a broad range of available financial tools, and you can avail tax deductions till Rs 1.5 lakh. Investing in the correct tools will help you to be in your financial ideas, but also saves your tax. You can also invest in Public Provident Fund (PPF), National Saving Certificate (NSC), bank Fixed Deposits (FD), Life Insurance plans etc. Investment should be made in products that you need, but just not for the purpose of investment. Choose online investment since it guarantees efficacy and tackles last minute fears. Offline payments can lead to things going wrong, like a sudden heart attack for instance, online transactions would certainly confirm a consistent process and halt any last minute urgency.
2. Health insurance investment: Invest on your health insurance blindly, because appropriate health insurance plans allows you to save tax under Section 80D of the Income Tax Act, and also offers you financial protection during hospitalization time. Section 80D offers deduction till Rs 25,000 for premiums paid and Rs 50,000 to senior citizens.
3. See beyond Section 80C and 80D: Make investments beyond the aforementioned sections. There is several unknown investment options that can help you save on income tax. Under Section 80TTA, one can avail tax deduction benefit till Rs 10,000 is permitted on interests on your savings bank account. Moreover, one can claim tax deduction benefits on medical treatment expenses, donations paid to NGOs or political parties, under Section 80G, 80GGA, and 80GGC.
4. Consult tax professional: It is never too late for you to have the correct time for making timely investments before the investment time limit. In most cases, people try to close their investments before the deadline, but make investments in wrong instruments that are not recommended, and later regret on it. Hence, it’s always advisable to consult an expert/ professional who would provide guide you with the right type of investments that provides tax saving and also help you be in line with your financial plans.
5. Plan early: Start your investments plans early from the start of a fiscal as chances of making mistakes in the last-minute choices are extremely huge. Planning early would help you to search your options and make a sound, and stable decision about your investments which would also aid in your long-term wealth creation plan.
(With agency inputs)...