Smart Planning To Save Tax

Despite understanding the importance of proper tax planning, we defer such decisions till the end of the tax year, only to invest money in haste. Thus failing to make the right investment choices. There are several instruments through which one can save tax and meet investment goals. While some of the instruments yield tax exempt returns, others yield taxable returns. Therefore, before proceeding to invest, one should keep in mind factors such as purpose of investment, taxability of returns, safety, liquidity, and tax deductions. The Income-tax Act, 1961 (ITA) provides for an overall deduction of up to Rs1,50,000 under Section 80C. Also, investments under the National Pension Scheme (NPS) could fetch an additional tax deduction of up toRs50,000 under Section 80CCD(1B) of ITA. Health insurance for family and parents could also generate an additional tax deduction of up to Rs75,000 under...