What Is Tax Saving? Tools of Tax Saving

What Is Tax Saving? Tools of Tax Saving

It is important to plan one’s finances properly. Plans should never be made on an ad-hoc basis or for a temporary goal or towards an ill-conceived objective. By proper tax planning, one not only reduces the tax liability but also end up saving towards the various goals one has set at different life stages.
Choosing the right tax-saving vehicle rests primarily on four things: How to avail tax benefits, the kind of tax-saving instrument, the tenure, and the taxability status. Equally important is to choose a tax-saving instrument which can be linked to a specific goal.
                                       

 How to avail tax benefits

 

Tax Savings Under Section 80C

The Annual tax benefits limit under this section is Rs 1.5 lakh in one or more eligible investments. The eligible investments include Life Insurance, Secured Saving Plan, Term Plan, Equity-Linked Savings schemes (ELSS), Public Provident Fund (PPF), and National Savings Certificate (NSC), Tax Saving Funds.

Tax Savings Under Section 80D

Premium paid towards a Health Insurance Plan, Mediclaim, Critical illness, Cancer Plan for self and family members qualify for tax benefit under Section 80D for Rs 25,000 and Rs 30,000 for those above 60.

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Tax Savings Under Section 80D

 

 

Tax Savings Under Section 80C

 

1MediClaimLife Insurance
2Critical illnessSecured Saving Plan
3Accident CareTerm Plan
4Cancer CareGovernment Bond
5Tax Saving Bonds
6Post Office Schemes
7Tax  Saving Funds

 

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