1.Know Your 80C
The most common investments people think of, when they think of 80C are PPF and ELSS.
The split in most people’s minds is Rs. 70,000 into PPF and Rs. 30,000 into an ELSS fund.
But hang on.
a. You’ve been contributing to your own Employee Provident Fund (EPF) all year.
Find out what this figure is from your HR department, and make a note of it.
b. Also, do you have a home loan? If yes, the principal repayment this year counts under 80C as well. Call your bank / housing finance company and ask them for a copy of your amortization table to see how much principal you have repaid this year.
c.Have you paid any stamp duty and the registration fees in respect of purchase of a house? If yes, the amount paid is covered under 80C as well.
d. Have you paid a premium for ULIP recently? If yes, your premium, or atleast part of your premium, is deductible under 80C too.
e.Invested into any 5 year FDs in the last Financial Year? These funds count as well.
Also:
f.Pension funds,
g.National Savings Certificate,
h.Senior Citizen Savings Scheme investments
i.Investments into the National Pension Scheme
j.Any life insurance premium you might be paying…
All of these investments are deductible under 80C.
Total up everything that applies to you, and now you’ll know what you have left to invest under 80C to meet your Rs. 1 lakh deductible limit.
2. 80CCF
You can invest into Long Term Infrastructure Bonds, and avail an extra Rs. 20,000 of tax deduction under Section 80CCF. If you’re in the 30% tax bracket, you will save roughly Rs. 6,000 on tax by investing into these bonds.
3.Salary Restructuring:
a.Opt for food coupons instead of lunch allowances, as they are exempt from tax up to Rs 30,000 p.a.
b.Include medical allowance, transport allowance, education allowance, uniform expenses (if any), and telephone expenses as part of salary. Produce bills of actual expenses incurred for these allowances to reduce tax.
c.Opt for the company car instead of using your own car, to reduce high prerequisite taxation.
4.Got Health Insurance?
Section 80 D
A straightforward mediclaim policy can save you tax on the premium paid.
If you are paying premium for yourself, spouse and kids, you can avail up to Rs. 15,000 deduction per annum (Rs. 20,000 if you’re a senior citizen) and you can also avail deduction for premiums you are paying for your parents (Rs. 20,000 if they are senior citizens, Rs. 15,000 if they are not).
5.Taken an education loan?
Section 80E.
If you have taken an education loan for yourself, your spouse, your kids, or even of a child of whom you are a legal guardian, then every year you can avail a full deduction of the interest you are paying on the loan (capped at 8 years).
6.Living on rent?
Show your rent receipts to claim deduction using your HRA (House Rent Allowance) benefit available to you in your salary structure.
7.Took a holiday anytime in this past year?
Kept your travel expense records? You can claim your Leave Travel Allowance as an exemption as well, for travel within India, for yourself and your dependents who have travelled with you. Speak to your HR department, produce your tickets, and you can claim your LTA.
8.Declare interest paid on home loan to your employer.
You will get a deduction of maximum of Rs. 150,000/- from your salary income in case of self occupied property.
9.Take unlimited deduction for your second home loan interest payment.
10.Declare Capital gain losses in your tax returns to save taxes in future.
Keep in mind the below points, to avoid the hassles of last minute tax planning.
•Give your employer details loans and tax saving investments before hand, to prevent any excess deduction.
•Check the Form 16 received at the end of each year from your employer thoroughly.
•It is important to start your tax planning well before 31st March, and to file your returns before the 31st of July each year.
Rupesh Choudhary
Head – Tax Advisory Services
