This January Don't Let Tax Eat Your Income - Tax Saving Options

January is a month where it is critical to ensure that you have done proper tax planning else you could lose a high sum of your income under the Government of India tax laws. Any individual can claim up to Rs. 1,20,000 i.e. Rs 1lakh 20thousand as tax exemption under section 80C, 80CCF, 80D etc. via investments.

Following are the investment options that an individual can utilize to claim tax exemption these sections:

• ·         Life Insurance – Max of Rs. 1lakh u/s 80c
• ·         Medical Insurance – Max of Rs. 1lakh u/s 80d
• ·         PPF / EPF / ELSS – Max of Rs. 1lakh u/s 80c
• ·         Infrastructure Bonds – Max. of Rs. 20,000 u/s 80ccf

While selecting these tax exempt tools it is important to effectively plan their utilization.

In an endeavor to assist individuals with their tax planning, DENIP Consultants has come out with a comparison of ELSS against PPF/EPF where an opportunity cost of Rs. 60 lakh is involved by selecting PPF over an ELSS scheme. We have also created an excel sheet comparing the top tax saving ELSS schemes available in the market for your reference. We would also advise investors to opt for dividend payout / reinvest option while selecting an ELSS scheme to take advantage over the 3 year lock-in period.

As far as claiming tax exemption under section 80ccf via long term infrastructure bonds, an individual can select from one of the 2 bonds available in the market i.e. IDFC Infra Bonds and REC Infra Bonds which are almost similar in terms of their offerings (8% for 5 years).

IDFC Infra Bonds:

Kindly feel free to get in touch with us via a phone call on (022)40156688/99 or 9320496699/9320196699 or by simply dropping us an email on dewang@denip.in / nimesh@denip.in if you need any clarification.

Thanks,
Dewang K. Mehta
DENIP Consultants Private Limited

Source: Various internet sources