Some last minute tax saving tips can still help the late bloomers and make them tax compliant before the end of the financial year.
With the onset of March every year, tax planning and saving become a primary concern for all. While a good financial plan begins from the first day of a financial year, if you have not been able to follow one, there is still some hope for you before it comes to an on March 31st.
1: Ensure Full Utilisation Of Section 80C
Section 80C of the income tax act offers a wide range of financial instruments that provide tax deductions up to Rs. 1.5 Lakhs. Identifying the right investment instrument is essential to ensure you are investing as per your financial plan and not simply for tax saving. For example, the recent introduction of long-term capital gains tax (LTCG) means that your investments in if you are a low-risk investor you can opt for investments in Public Provident Fund or PPF, National Savings Certificate, bank Fixed Deposits etc. Opt for an investment which works for you and not blindly follows what others suggest.
2: Opt For Health Insurance
If you still have not bought a Health Insurance plan or have been relying only on your group health cover offered by your employer, this is the best time to get it. Section 80D helps you in getting maximum tax deductions of Rs 25,000 for health insurance premium paid for self and family if you are under 60 years of age and Rs 30,000 for people above 60 years of age.
3: Look For Tax Deductions Beyond Section 80C
The interest you receive on your money parked in your Savings Bank account allows for a tax deduction benefit of Rs. 10,000 under Section 80TTA. Similarly, there are many less popular tax saving sections which majority of taxpayers overlook. You can explore options like Section 80DDB, which can help in claiming tax deductions with regards to the payment of expenses relating to the medical treatment of any specific ailment. Donations made to NGOs or political parties can help you in getting tax deductions under Section 80G, 80GGA and 80GGC.
4: Opt For Professional Help
The beginning of March may still offer you a good time to seek professional help on how to optimise tax saving. Majority of taxpayers in their quest to save tax sometimes opt for unnecessary financial instruments which are not in line with their financial needs and objectives. A financial planner can help you suggest the right financial instruments that offer both value for money investments and tax optimisation. Since everyone has unique financial liabilities as well as risk-bearing capacity, there cannot be a common tax saving plan for all.
5: Start Next Year’s Tax Planning Now
Ensure you start investing in the right financial instruments since the beginning of the financial year so that you can save tax as well as make financial gains from your investments. Starting early also allows enough time to understand the terms and conditions for each investment, focusing on long-term wealth creation along with tax management.