As the year draws nearer to its end, we see many salaried persons running from pillar to post in search of best investment options. Being employed as an accountant with my company for the past 4 years, I too would try similar antics just before filing of the returns.
However, my great accountancy skills and knowledge of all these years have served me well in my practical life as well and hence now without getting frantic of the taxes, I face it all head on due to my highly effective ideas of tax planning including:
Restructuring of Salary:
A rarely applied rule, salary restructuring is not possible always. However, if your company has provisions or your HR department is too good to understand the complications, it is always advisable to go for salary restructuring. Use of food coupons and producing actual bills of expenses could lessen the tax burden.
Wonders of Section 80C:
With up to Rs 1, 00,000 as the maximum deduction under Section 80C, you too can invest in certain public deposit funds. Presently I have invested in Equity Linked Savings Scheme, Life Insurance, National Saving Certificate, and Public Provident Fund as well.
Looking past 80C:
Apart from 80C, deductions under section 80D, 80CCF, and 80G as well are available. Medical insurance of self, spouse, parents and dependent children and donations to specified charitable institutions can be taken advantage of.
Making use of the house rent allowance is sometimes overlooked by most of us. Therefore, ensure that the HRA is benefitted from as section 80GG says so. Clarify on the HRA part with your company beforehand.
It is very important that everything about all kinds of loans especially home loan is corresponded to the employer well in advance. Section 80C provides a deduction of maximum of Rs 1, 00,000. Therefore, using home loan efficiently should be a priority.
Tax on Bonus received
Receiving bonus from employer is taxable in the assessment year. If possible, politely ask for the bonus payment to the subsequent year. This will help you make great savings from tax!
Leave Travel Allowance
Last but not the least, using leave travel allowance efficiently goes a long way. It is available twice in a period of four years, and in most cases, leave travel allowance is easy to take advantage of.
Stay calm and plan your tax so that there are no hassles to face later.