Best Tax Saving Investment Plan

Best Tax Saving Investment Plan

Tax planning is a skill that anyone can learn through a little bit of effort. However, it is a skill that everyone should educate themselves on.

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Proper tax planning eradicates the last-hour rush

The usual scenario looks something like this- In the month of April, people are way too relaxed. They think that they have an entire year left to do tax planning. So, the idea of planning your taxes right from the beginning of the year sounds useless to most people. They delay the process. Mid-year, they get all busy with their workload, deadlines, and family.

As the month of February approaches, taxpayers start to panic and search for all ways to save tax. After all, it is difficult to part with your hard-earned money. People make hasty decisions and just want to invest their money anywhere so they would be able to claim it for a tax deduction.

Tax planning should begin from the start of the year and is to be carried on throughout the year. You can either take time and understand things on your own. Or, you could consult a tax professional who would guide you with all the investments that you could make for a tax deduction.

Also, they would help you in choosing the best investments as per your needs and not merely for a tax deduction. As you would have done all-year-round tax planning, there would be reduced stress and anxiety when it’s time to file the ITR.

Here are the best investments that you can make to reduce your tax burden:

Section-80D

This section of the Income Tax Act allows Individuals and Hindu Undivided families (HUFs) to claim deductions on the premium paid on health insurance and expenses towards preventive health checkups for self, spouse, dependent children, and parents. 

You can claim up to Rs.25000/- paid towards insurance premiums of self, spouse, and dependent children only. If you have taken insurance for your parents aged below 60 years, you can claim a deduction of an additional Rs.25000/-. For senior citizen parents, the deduction ceiling is Rs.50000/-. You could secure yourself by purchasing the HDFC ERGO’s Health Suraksha/ HDFC ERGO Critical Illness Plan.

Section-80C:

One can claim a total of Rs. 1,50,000 by investing an aggregate of the mentioned amount in one or some of the following investment options:

• Equity-linked savings scheme (ELSS)- Axis Long Term Equity Fund and Mirae Asset Tax Saver Fund.

• National Savings Certificates (NSC)

• National Pension Scheme (NPS)

• Fixed Deposits with banks 

• Fixed Deposit with Post offices

• Sukanya Yojana

• Children’s tuition fees

• Unit Linked Insurance Plan (ULIP):  You could invest in ULIP products like HDFC Life Young Star Super Premium or HDFC Life Pro Growth Plus.

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