Skip to main content

Save on taxes and Maximise your gains

 

When you have to save on taxes, it's better to start investing at the beginning of the year and enjoy best of both worlds


   COME January and it's time to plan tax-related investments. The usual favourites are Public Provident Fund (PPF), National Savings Certificates (NSC), and equity-linked savings schemes (ELSS), bank deposits, and life insurance, which help you save taxes up to Rs 1 lakh under section 80C. But what we need to follow is a systematic approach to make gains from these investments than merely save on taxes. 

   "The best thing for an investor to follow is to invest in tax-saving instruments from April itself. The salaries shrink in the months of January and February. At this juncture, investing the balance funds for saving taxes will tighten cash flows," says Suresh Sadagopan, a certified financial planner, Ladder 7 Financial Advisories.

MAKE PPF A HABIT

Investors tend to invest chunks in PPF in the last two months of the financial year. In such cases, investors don't benefit from the annual return of 8%. Ideally, an investor should invest before the 5th of every month in PPF to earn interest for that month. In case of cheque payments, ensure your cheque gets cleared by this date.

GAIN FROM HEALTH COVER

Most employers offer health benefits to employees in the form of group mediclaim covers up to a maximum of Rs 5 lakh. Hence, you may not feel the need for a standalone mediclaim. PV Subramanyam, a chartered accountant and financial trainer says: "The need for this cover will be felt especially in case of a job loss, retirement or a job transition as the employer's cover will lapse." You can opt for a family floater for dependents and benefit from lower premiums of up to 20%. Additionally, you save taxes of up to Rs 15,000 if you cover your dependent parents.

CASHING IN ON YOUR HOUSE

If you and your spouse bought an apartment for Rs 60 lakh and made a down payment of Rs 15 lakh, both will borrow Rs 22.5 lakh each, assuming the ownership share is in the ratio of 50:50. The overall tax deduction in your case would amount to Rs 3 lakh. The tax benefit will be shared in the same ratio as the ratio of the loan amount availed by the husband and wife. The idea is to give a higher ownership share and hence, the higher liability to an individual with higher taxable salary.

 


Popular posts from this blog

What is Electronic Clearing Service (ECS)?

  As the name suggests, it's an electronic process through which money can be transferred from one bank account to another. According to RBI, this mode is usually used for regular payments and receipts, like distribution of dividend, interest, salary, pension etc. This mode is also used for collection of bills for telephone, electricity, water, various types of taxes, payment of EMIs , investments in mutual funds , payment of insurance premium etc. There are two types of ECS , like most other banking transactions, ECS credit and ECS debit. An ECS credit is used by a bank account holder , usually a large company or an institution for services like payment of dividend, in terest, salary, pension etc. If your mutual fund pays you dividend to your bank account, of all probability it is being paid through ECS credit.ECS debit, on the other hand, is used when a company or an institution is getting money from a large number of people. For example if you are investing in a mutual fund sc...

WEALTH TAX

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300 WEALTH TAX   WHAT CONSTITUTES WEALTH? For wealth tax purposes, "wealth" means property , urban land, car, jewellery , yacht, boat, aircraft and cash in hand in excess of Rs 50,000. CAUTION POINT | Do not think you will have an easy escape from wealth tax by transferring your `wealth' without consideration to your spouse or minor child. Such assets will also be considered as your wealth. HOW TO DETERMINE YOUR TAXABLE WEALTH Add the taxable value of the above assets (computed as per the detailed rules for valuation) owned by you as on March 31 (for FY 2014-15, it will be March 31, 2015). In case you sold your car during the year, it will not be taxable wealth. Deduct loans if any obtained by you to acquire any of the taxable assets from the value of gross tax out for at least 300 days in a...

Equity Savings Fund

Invest Equity Savings Fund Online   The best part about these funds is that they are subject to equity fund taxation and at the same time are structured like MIP like funds . This new category, equity savings funds , offer a little of everything. They allocate money to equities & equity related instruments, and fixed income. They aim to generate returns by diversification. Such funds invest in fixed income and arbitrage to protect the investors from short term volatility and equity for capital gains. The best part of these funds is that they are subject to equity fund taxation and at the same time are structured like MIP funds.   MIP funds however are subject to debt fund taxation. Investors Equity savings funds are suitable for the following: First time investors who seek partial exposure to equity with less volatility and greater stability Investors seeking moderate capital appreciation with relatively lower risk Those wh...

How to Pick Top Performing Mutual Fund Schemes

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   How to Pick Performing Schemes  Funds that continue to stay in the top grade of performance over longer periods are the ones to bet on, advise investment experts   The mutual fund performance charts of the past few months make for an impressive reading. Funds across all categories boast of stellar returns. Sample this: The mid and small cap category has averaged 77 percent return over the past 12 months, with the best fund delivering a staggering 120 percent. The tax-saving funds also average an impressive 51 percent, including a fund which has soared 92 percent. Many of the table-toppers are funds of proven quality and track record. However, there are also schemes that are not that well-known. Some of these have rarely made it to the performance charts in the past, yet, of late, they bo...

8% Government of India Bonds quick guide

For those seeking comfort in safety of returns, the Government of India issued 8% savings bond once again comes to the fore. First launched in 2003, these bonds are issued by the government with a maturity of 6 years. The bonds are available at all times with specified distributors through whom you can apply to invest in them. Here is a quick guide to what the bond offers and its features to ascertain to check for suitability. What are Government of India bonds Government of India bonds are like any other government bonds with specified rate of interest. The rate is fixed at 8% per annum paid half yearly, or you can opt for cumulative payment of interest at the end of the tenure. You can buy these bonds from State Bank of India and its associates, other nationalized banks and some private sector banks such as HDFC Bank Ltd and ICICI Bank Ltd, among others. The bonds can be bought from the offices of Stock Holding Corporation of India as well. They are available in physical form onl...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now