Do you think tax is a burden? Most of the tax payers believe so. If you are a wealthier man, you have to submit a huge amount as tax for the government. To down your tax payment it is necessary to establish a well tax planning criteria which limits the tax pay. For good tax saving, knowledge about the available deductions and exemptions granted by the income tax act is an essential element. So try to gain all the details about those allowed deductions to feel a fare tax system.
Tax deductions allowed by the IT act will help you to reduce the tax incurred on you. Allowances, educational expenses, home & vehicle repair expenses, medical expenses, Insurance premiums, telephone re imbursement, home loan payments etc are eligible deductions one can possess. The tax exemptions are also come under the tax saving options. So also concentrate on the exemptions you have. Some mode of investments also eligible for deductions. Some of the are investments on stock, bond, real estate, post office schemes, fixed deposit schemes of certain financial institutions, fixed income security schemes like provident fund scheme etc are also come under deduction category.
As we approach financial year end, it is the time to estimate tax procedures. Don’t miss any tax saving opportunities. According to financial experts, for better tax break, investors should look at the tax advantaged investment options. Tax free investment options are a good tax saving tool. PPF (Public Provident Fund) is an important tax saving tool. Most of the tax payers now investing on PPF as it deliver tax free interest. PPF earns 8% per annum with a lock period of 15 years. These interests are also reinvested in to the fixed deposit. PF (Provident fund) also listed under the tax saving tool. Employee’s contribution towards PF investments are tax free. Equity funds also offer a systematic investment plan to the investors who are looking for a tax break.
One of the most popular taxes saving tool now available is ELSS (Equity Linked Saving Scheme) offered by mutual funds. These options guard the investors from the volatile action of the market and yields maximum returns. As it is an equity investment, it will surely be a high return investment. Lock period for this tool is 3 years. After these three years, if the market values may be down at that time, you will have the provision to hold the investment longer to get maximum return. The main advantage on this tool is, you have to save tax and returns are totally tax free.
Thus tax planning is the most important part of the tax saving procedure. The future implications on the tax saving strategy will definitely depends on the analysis and investigations you have done in the past .By doing some home work you can find vast ways for better tax break For better result lets go for it.