Good Evening Readers,
The end of Financial Year 2017-18 is approaching fast and every taxpayer is busy in tax planning so they can invest and save taxes for this year. So here I am listing various good options to invest and save taxes for March month:-
Life Insurance Premium:
Life insurance policy can be taken on own life, the life of spouse or child, the child may be dependent/independent, male/female. Major/minor, married/unmarried. Life Insurance Premium should not exceed 10% of sum assured. It is advisable not to mix investments with insurance, buy term plan or pure risk cover plans.
Public Provident Fund
Invest in PPF by opening an account in own name or in the name of the dependent minor child or in the name of spouse. Interest earned from PPF account is exempt from tax.
Tuition Fees
Amount towards tuition fees at the time of admission or otherwise to any university/school/college/educational institution in India for full-time education of any two children. Full-time education includes play school, pre-nursery and nursery classes.
Home Loan
The home loan includes two components principal and interest. The benefit of principal on the home loan is covered under section 80C to the extent of Rs. 1.5 Lakhs subject to the condition of not selling Home for 5 years from the date of possession. The benefit of Interest on Home Loan for the self-occupied property is available to the extent of Rs. 2 lakhs, for let out property without any limit.
Interest on Loan taken for Residential House Property
This is applicable from FY 2016-17 onwards, Conditions
The loan must be taken during 1-4-2016 to 31-3-2017
Amount of loan does not exceed Rs. 35 lakhs
Value of house property should not exceed 50 Lakhs
Assessee does not own any residential house property on the date of sanction of loan
If above conditions are satisfied then deduction of interest of up to Rs. 50,000 is available. No deduction is allowed for this interest under any other section.
Fixed Deposit
Fixed deposits for 5 years or more eligible for tax saving investments. Interest earned on these Fixed Deposits is taxable.
Stamp Duty
Stamp duty or any registration fees paid for the purchase of residential house property is eligible for deduction.
National Pension Scheme
Contribution towards NPS is eligible for the additional benefit of Rs. 50,000 over and above maximum limit of Rs. 1,50,000 under section 80C.
Equity Linked Saving Schemes (ELSS)
Investment in certain mutual funds with the lock-in period of three years is eligible for deduction.
Medical Insurance Premium / Preventive Health Check-up
To avail, the benefit of this deduction payment must be made by cheque or through banking channel. The benefit of up to Rs. 25,000 is the available and additional benefit of Rs. 5,000 is also available if medi-claim policy is taken on the life of a senior citizen.
Interest on Loan Taken for Higher Education
The loan can be taken for spouse or child, the deduction is available for the maximum period of 8 years, the benefit of deduction is available from the year in which payment of interest starts. This benefit is also available for loan taken for foreign education.
So Invest and plan your taxes.
Keep Reading, Keep Learning
CA Pankaj Kumar Sharma
Can be reached at - pankajsharmaupw@gmail.com
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