Tax planning implies the spelling out of financial goals, where by the financial goals are aligned according to the tax liabilities and taxation is managed in a legal and systematic manner. Before planning tax liability it is important that the taxpayer studies a few basics.
Every taxpayer shall go through Section 80C for getting acquainted with tax planning with schemes like ULIPS, Life Insurance Premiums, National savings certificates (NSC), Post office savings etc.
Maintain A Separate HUF Tax File
The first step in tax planning is maintaining a separate HUF tax file (if the tax payer is a Hindu), apart from the individual tax file. The HUF enjoys the basic income-tax exemption of Rs. 2,00,000 and also enjoys tax deduction in terms of section 80C as well as deduction for interest on housing loans.
Buy Property In Joint Names
With respect to buying property, in most cases, it will be wise to purchase property in joint names as it would lead to greater saving in terms of tax and better investment planning as every co-owner will enjoy a separate deduction of interest on housing loan.
Look Beyond Section 80C
An important tip to tax payers would be to look beyond 80C, there are other sections such as 80D, 80DD, 80DDB, 80E, 80G, 80GG, 80GGC, 80U AND 80CCF that can help in greater tax savings. These sections hold information for understanding tax planning and exemptions for specific cases such as medical treatment for dependent handicapped, medical premium for senior citizens loans for educations and the like.
New Retail Investors Can Invest In Rajiv Gandhi Equity Saving Scheme
The tax year 2013, a few IT Section 80CCG provisions are encouraging debutant stock market investors. Accordingly, those who are investing in the stock market for the first time can make an investment up to Rs. 50,000 and have the benefit of a tax deduction equal to 50 per cent of such investment. It makes good financial sense to do tax saving by exposure to Rajiv Gandhi Equity Investment Scheme.
Other Important Things To Remember
- Salaried people shall keep an eye on the Provident fund provisions as a few amendments are expected soon.
- All the health insurance products are eligible for tax saving under the section 80D.
- The IT Department has started collecting spending data of high profile spenders through “306” watch, there 2013 is the year of doing sound tax planning.