Tax Planning

Tax Planning

Income Tax

Tax planning is very important part of financial planning. Not planning tax leads to higher tax outgo from your pocket. Some people also use income tax calculators. Good income tax planning make use of exemptions and deductions to minimize tax liability. Income-Tax(IT) act allows various deductions from 80C to 80U. Income tax department keeps an eye on taxpayers for income tax submission.

Most planners suggest that in any financial planning first step is to have adequate health insurance plan for self and family even before starting to save different goals. It also provide tax benefit in income tax return because the premium paid for health insurance reduces taxable income so less tax liability. In case of income tax preparation, the premium paid qualifies for deductions under section 80D of Income Tax Act.

To avail HRA exemption benefit, there is no need to provide PAN no of landlord to your employer if you are paying rent less than 1 lakh per year. PAN no is mandatory is yearly rent paid is more than 1 lakh to avail HRA benefit. Tax deduction is availed under section 80GG..

Section 80E allows individual to consider interest paid on educational loan as deduction from gross total income. Interest received on tax saving FD is taxable.

Section 80G of Income-Tax Act allows donations for charity made to specified relief funds and charitable institutions as deduction from gross total income.

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