How to save income taxes

“How to save taxes” is one of the biggest concern for any salaried person in India. You can see people asking others and tax consultants to give them advices on tax saving. So here are few advices and tips on tax saving in India.

Under section 80C, you can save tax by investing up to rupees 1,00,000 (One lakh) in various tax saving bonds and buying insurance. But there are more options available to you than just
section 80C, like.

• You can invest up to Rs. 70000 per annum in PPF, where the interest is tax-free. However, you could invest up to max Rs. 1 Lakh with additional PPF investment in the name of any other dependent family member like your wife or children and you can claim the deduction.

• You can buy a Mediclaim policy of premium 15000 per annum. This way you will have tax benefit as well as you will have good money incase of any health issues.

• Buy LIC or other life insurance policies that will give you some tax benefits. Maximum limit for LIC premiums are up to Rs. 1 Lakh. Premium paid in any year should not exceed 20% of the sum incurred. Also please note that the sum paid in excess of 20% will not be allowed for any deductions.

• You can show some of expenses as House rent, Even if you are not paying directly, but for the shake of saving some tax, you can show it as if you are staying in your family home but you pay rent to your father/mother.

• Invest in ULIP (unit linked policy). Minimum Limit - Rs. 15,000 with annual contribution of Rs. 1,000 and Maximum Limit - Rs. 2 lakh with annual contribution of Rs. 20,000. You will get exemption from wealth tax.

• You can buy some National Saving Certificates (NSC). It offers you flexibility like PPF. and is Available at any post office in a denomination as low as Rs. 100.

• Kisan Vikas Patra. here your money doubles in 8 years and seven months. Available at any post office in denominations of Rs. 100, Rs. 500, Rs. 1,000, Rs. 5,000 and Rs. 50,000.

• Get some home loans, if you plan to buy a home. You will get tax benefit against Interest paid on housing loan for self-occupied house property.
And above all when doing your tax planning, look at it comprehensively. Consider taking a good look at your insurance needs, your investment needs and whether or not you are servicing a home loan.