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Income Tax Planning

Do you wish to plan your Income Taxes efficiently so as to reap maximum benefits of the deductions provided by law? Don’t worry; we will help you in it.

    tax planing

    Income Tax Planning

    Tax Planning means reducing tax liability by taking advantage of the legitimate concessions and exemptions provided in the tax law.

    Paying taxes to the Government is one way to contribute to the nation’s growth. But when the government has some tax benefits schemes to curb the amount of taxes payable, it is always advisable to make use of them.
    Income Tax Planning helps you make smart investing decisions so that it can help you reduce the tax burden thereby leading to your economic growth.
    There is a wide range of tax savings instruments available in the market. You need to make a wise decision while choosing them so that along with saving taxes, you can also generate some additional income/ benefits from them.

    Few examples of Tax Saving schemes are:

    tax planing

    Section 80 C

    Section 80 C of the Income Tax Act provides an option to the tax payer to invest in several schemes like EPF, PPF, ELSS, Fixed Deposits, Life Insurance Policies, Pension Plans, Mutual funds, other government backed retirement benefits schemes, etc.

    The maximum deduction available under this section is Rs. 1,50,000 and thus tax payers can invest in these schemes to save up to Rs. 46,800 of taxes payable to the Government. However it is to be noted that this scheme is only open for Individual and HUF.

    Section 80 D

    Section 80 D allows the tax payer to avail tax benefits on the premium paid towards health insurance policies for self, parents, spouse and children.

    The amount of deduction available is:

    Situation For Self, spouse, dependent children For Parents For members of HUF
    General deduction for medical insurance premium paid
    Rs. 25,000
    Rs. 25,000
    Rs. 25,000
    Additional deduction if policy taken for a senior citizen
    Rs. 25,000
    Rs. 25,000
    Rs. 25,000
    Medical Expenditure of senior citizen(if mediclaim premium not paid)
    Rs. 50,000
    Rs. 50,000
    Rs. 50,000
    However, it is to be noted that the maximum deduction allowable under this section shall not exceed Rs. 50,000 and that this scheme is available only to Resident individual and HUF.

    Section 80 E

    Taxpayers have an option to claim deduction towards the education loans taken for 8 years starting from the date of repayment. The one condition required to be met is that the loan should be taken from a recognised bank or non-banking financial institution. It is also to be noted that this scheme is only available for individuals.

    HRA Benefits

    Taxpayers staying in rented accommodating and paying rent can claim exemption on the rent paid by them.

    The amount of HRA exemption available will be least of the following:
    1. Total HRA received
    2. Total rent paid as reduced by 10% of their basic salary
    3. 40% of the basic salary for taxpayers residing in non-metro cities and 50% of the basic salary for taxpayers living in metro cities.