10 Tax Planning Tips

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10 Tax Planning Tips for A.Y. 2016-17
  10 Tax Planning Tips for A.Y. 2016-17 As the new Assessment Year approaches, all tax payers need to start focusing upon taxplanning. Section 80 of the IT Act of India has been serving as a boon for the tax payers. Thissection offers numerous forms of deductions which a tax payer can claim while filing his return for a particular AY.Sponsored LinksListed below are some of the best ways to minimize your payable tax and create a pool of savings for yourself. The top 10 tax planning tips which will help to gain in AY 2016-17 are: Consider deductions Under 80C The section 80C mainly deals in offering deductions to tax payers who invest in sectors like Fixed Deposits (5 years), PFF, Pension plans, EPF, etc. The scope of this deduction will allowthe tax payers to claim deductions upto INR 1, 50, 000 for the AY 2016-17. Use NPS Under 80CC The term NPS represents New Pension Scheme. The Government of India has recentlyintroduced this scheme with a view to create better saving habits amongst tax payers.Investing in the NPS will allow the tax payers to claim a deduction of INR 1, 50, 000 in theAY 2016-17. However, if a tax payer withdraws from such investment plan, then the samewill become taxable.  Medical Insurance Under 80D Your concern for health can increase your wealth! The IT Department offers a deduction of INR 25, 000 for tax payers who invest in Medical Insurance. If you are a senior citizen, thenthis benefit is extended to INR 30, 000.Note: Deduction for medial insurance premia etc. u/s 80 D raised to Rs. 25,000 (Rs. 30,000in case of senior citizens for A.Y.2016-17) Help Disabled Dependents Under 80DDB Taking care of a disabled person at home can become a burden. However, the Government of India is offering an assistance to you by allowing you to claim a deduction of INR 80, 000 perAY in respect of the expenditure borne for taking care of the disabled person. Repay Higher Education Loans Under 80E Are you still carrying the burden of your higher education loan? Under the Section 80E, the IT Department allows you to claim a deduction upto INR 1, 00, 000 towards loan repayment inrespect of higher education. Charity Under 80G Charity can be a good area for you to claim deductions. Various charitable organizationsaccept donations from common men and donating money to one of such organizations canallow you to claim 100% deduction. All that you are required to do is maintain a proof of yourdonation.Note: Deduction u/s 80G up to 100% for donation to Swachh Bharat Kosh, Clean Ganga Fundand National Fund for Control of Drug Abuse. Payment of Interest for House Building Loans Under 24B The significance of this section is mammoth! Under this section, a tax payer is eligible toclaim a deduction of INR 2, 00, 000 as interest on house loan. Additionally, the purview of section 80C can also be combined here, which offers an additional deduction of INR 1, 50,000 for House Building Loan’s principal amount. In total, you can claim a deduction of INR 2,50, 000 for the purpose meeting your house acquisition costs.  Transportation Allowance Under 10 One of the lesser known areas of deduction is Section 10. Under this section, a tax payer caneasily claim a deduction of INR 19, 200 as his transportation charges. If a person isphysically disabled, then the benefit of this amount increases to INE 38, 400. Know your taxable income Apart from searching deductions and making adjustments in your expense column, youshould also plan to compute your right taxable income. Collect all your revenue andexpenditure sources and figure out the correct tax amount which you will be paying for AY2016-17. In case you need help, feel free to contact an expert. Pay your taxes on time Last, but not the least, pay your taxes on time. It is important to pay your taxes before thedue date as it helps you to get refunds faster. If you are not paying your taxes on time, thenissues such as interest on refunds and penalties may increase your tax liabilities.Sponsored Links
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