Tax planning has always been the test of efficiency for people along with being a test of their cunningness such that they can save their taxes in a lawful manner. Here are some of the tips that can help you to plan your taxes for F.Y.2018-19.
1) Invest in policies
Policies are a prominent way to save a handful amount of tax. Up to Rs. 1, 50, 000 (A.Y.2018-19) can be saved by way of investing PPF, EPF, Fixed Deposit for 5 years, Pension Plans, etc. as specified u/s 80C, 80CCC and 80CCD.
2) Divide Income to various family members
Avail the basic exemption limit of Rs. 2.5 Lakh (A.Y.2018-19) in the various family members as possible. Prefer senior citizens like parents and women as then can avail higher exemption limit.
3) Contribute to NPS
NPS stands for New Pension Scheme was has recently been initiated by the Government under which investors can claim a deduction as a have a Tax free NPS return, however, withdrawal under such system is till taxable. You can get extra deduction for contribution to NPS up to Rs.50,000/-
The maximum deduction as an aggregate of section 80C,80CCC & 80CCD(1) should not exceed Rs. 1,50,000 but after including section 80 CCD(1B), total deduction limit becomes Rs. 2,00,000.
4) The aid of Medical Insurance
A deduction of Rs. 25, 000 is available for people who wish to invest in medical insurance for self. This deduction increases to Rs. 30, 000 when it is done by senior citizens. More about medical insurance deduction. You can also get deduction of parent’s mediclaim if paid out of your own funds. The expenses on preventive health checkup is also eligible for deduction under section 80D.
5) Expenditure towards disabled dependent
When certain amount is spent in form medical insurance for a disabled dependent, deduction up to Rs. 75, 000 is available where the disablement is normal in nature. The same can be extended upto 1,25,000 is the disablement is of severe type. More about deduction u/s 80DD
7) Repayment of Higher Education Loan
When repayment is carried out for higher education loan, the same is also allowed as a deduction and hence can reduce ample amount of tax liability. More about Deduction 80E: Interest on Loan Taken for Higher Education
Donation to charitable trusts and organizations have always been regarded as an auspicious event, therefore, 100% deduction is available in such context. The same rate is also applicable in situation where contribution is made to a political party.
9) House loan interest
People who are liable to pay house loan interest can also claim deduction upto Rs. 1, 50, 000 (the figure represents the maximum investment limit)
Above all be honest in your means and that is the prime principle for tax planning.