Tax filing season is right around the corner. Now, under the various sections of the Income Tax Act, you can claim various deductions and exemptions, which will help you save tax. Eligible taxpayers can make use of the deductions available from Sections 80C through 80U.
You should ensure that all of your tax-saving investments are made well before the deadline of March 31st, 2020. However, considering current situations, the government has extended this deadline to June 30, 2020.
We understand that filing income tax can be quite a tedious and confusing process. A lot of hassle includes when submitting different insurance acknowledgements. However, if you want to save money on tax, it is essential to manage all the investment and insurance instruments for tax-saving purposes.
When it comes to tax-saving, you have to understand the income tax slabs. Now, after the announcement of the Union Budget 2020, a new tax regime was introduced to help people save money. However, this new regime is optional as most tax deductions and exemptions have been eliminated from it.
You can continue to file tax under the old tax regime and continue to claim tax deductions and exemptions. This is where tax planning comes in handy. If you are looking to save on taxes, you either have to make investments and seek insurance for a trusted provider.
With effective tax planning, you can save a handful of money on tax from your taxable income. Here, we give you a detailed overview of the scope of the various tax-saving sections, which will help you do so.
The different types of Tax Saving tools available on Finserv MARKETS are:
A health emergency can strike anytime. Moreover, with the rising inflation it will be difficult to cope up with the rising medical costs, thereby affecting your savings. A health insurance policy covers you for emergency medical costs and the financial loss incurred during treatment. You can also enjoy tax benefits with health insurance under section 80D. Health insurance plans available on Finserv MARKETS are tailor-made to suit your needs and offer various benefits including comprehensive coverage, cashless claim facility across 6500+ network hospitals, and much more.
ULIP (Unit-linked Insurance Plan) is a combination of insurance and investment plans. It serves as an investment tool for those who want to make the most out of their investments while saving on taxes. The other part of the ULIP, the life insurance policy is also beneficial for the investor. Moreover, you can claim tax deductions of up to INR 1.5 lakh on the investments made in ULIPs under Section 80C of the Income Tax Act.
Be it saving for your child, building a corpus for your retirement, or saving on taxes, Finserv MARKETS brings Bajaj Allianz Life Insurance ULIPs that are sure to fetch you great returns.
Life is full of unpredictable scenarios, where you never know what could come your way. In this case, protecting your life's goals is important to ensure that you are prepared for the worse. Also, it allows you to claim tax deductions under Section 80C of the Income Tax Act, 1961.
A comprehensive term plan like the Smart Protect Goal Term Insurance available on Finserv MARKETS acts as an ideal financial security to safeguard your future goals and ensure that your family keeps up with their future aspirations even if anything were to happen to you.
Looking for tax benefits through an investment vehicle? ELSS Tax-Saving Funds is the best choice for you. With a lock-in period of just 3 years as a major benefit, you can also enjoy tax deductions of up to Rs. 1.5 Lakhs on the investment in ELSS under SectIon 80C of the Income Tax Act. Money can be invested either through SIP or One-time as well. So what are you waiting for! Grow your wealth and save taxes with ELSS.
National Pension Scheme (NPS) is a government scheme, to provide people with financial independence post retirement! You can get tax benefits under section 80CCD (1B) of the Income Tax Act with an additional deduction of Rs. 50,000/-. What’s more! You can get flexibility of choice with a host of investment options and fund managers. It is regulated by PFRDA (Pension Fund Regulatory and Development Authority). What's more! You can easily track and manage your NPS account online with easy portability.
Income tax rates for individuals in India are based on their age and income. Every year, the Government announces tax slabs applicable as per these parameters in the Budget.
For Males below the age of 60
For Females below the age of 60
For Senior Citizens (resident taxpayers aged 60 and above)
For very Senior Citizens (resident taxpayers aged 80 and above)
At the beginning of each financial year, you are required to carry out an investment declaration. An investment declaration is an estimate of the investments you intend to make in the following year. The proof of your actual investments need not be provided until the end of the fiscal year. You are permitted to invest more or less than your estimated amount. In other words, the eventual investments need not be exactly as declared.
The purpose of an annual investment declaration is so that your employer can know about your tax-saving investments for that year. Your employer can then deduct tax from your monthly salary in accordance with your investments. Therefore, declaring your investments is essential as it leads to greater in-hand salary.
This situation arises when an employee is not able to invest the amount as declared by their employer. It can also be the result of the employee being unable to make requisite changes to the documents that have been given to their employers within the necessary time-frame. The employer will most likely assume that the calculation of their employee’s tax deduction is inaccurate.
In this scenario, the employee owes the employer more in taxes, as they have not invested in enough tax-saving instruments. Hence, the employer has no choice except recalculating the employee’s tax liability and subsequently adjusting it in the next few month’s salary (February / March). This is why in the last one or two months of the fiscal year, the employer’s salary will be lower from added tax.
However, employees can also receive a tax refund from the Income Tax Department. This only possible if one has made the requisite investments for tax-saving declares these investments during filing season. Additionally, they must also request a tax refund from the Income Tax Department.
Finally, in case the employer does not deduct tax from the employee’s salary, it will be directly owed by the latter to the Indian government. The same consequence follows when the employee has an additional source of income which, for whatever reason, has been unaccounted for by their employer. The employee now has to pay taxes directly to the Government. It is possible to pay taxes online through Challan 280 which is on the Income Tax Department’s official website.
This situation is when an employee invests the exact amount that has been declared at the start of the fiscal year. The taxable income of the employee will be equal to the taxable amount calculated by their employer. Additionally, in this situation, the tax paid by the employee is also equal to the amount owed to the Income Tax department.
Hence, it follows that the employee simply has to file his tax returns during the year’s end. In this situation, filing returns is simple, unless there is an additional source of income not accounted for.
Suppose an employee declares investments worth Rs.60,000, at the start of the fiscal year. However, by the end, she ended up investing Rs.1.2 lacs into tax-saving instruments. This simply means that the employee has saved more in taxes. Simultaneously, the employer has been subtracting tax from his employee’s salary with the presumption that she will only invest Rs.60,000 as stated in the declaration.
This means that the employer has been paying a larger tax than actually required to the government on behalf of that employee. In such cases, the employee, as well as the employer, are eligible for a tax refund. The refund can be requested when they file tax returns.
It is smarter to declare your investments at the start of the year. This ensures that your employer will deduct tax from your salary. Hence, you are maximising your tax-savings early on.