Income Tax Saving Guide and Tax Planning

The New Year is the best time to review financial investments, mainly Tax Saving Investments

Indians celebrate New Year depending on the community they belong to. But, there is one New Year they celebrate each year that cuts across all community lines which is January 1 as per the Gregorian calendar. The New Year brings new resolutions and new hopes. It also signals a period for taking stock of a person's financial health. The first three months of January, February and March see the financial world represented by banking, financial services and insurance (BFSI) industry in all its varied manifestations. BFSI industry goes overboard to woo investors with information on various tax saving schemes aimed at attracting investments in financial products. During this period, the BFSI industry concentrates on investments that help to minimize the incidence of income tax. This period is the best time to take stock of your financial situation and correct any anomaly that may exist.


Government of India's efforts to incentivize tax savings with Income tax benefits

The government uses various instruments to inculcate a savings habit in people. One of the main incentives is the offer of income tax benefit on investments. The annual budget exercise in February each year details the tax benefits applicable for the new financial year. The government's proposals receive intense scrutiny from both investors and stakeholders of the BFSI industry.


Efforts by BFSI industry to entice investors with tax saving schemes

The BFSI industry participants create financial products aimed at the investors who want to save to take advantage of the tax benefits announced by the government.


In the deluge of offers that companies in the BFSI industry make, it becomes difficult for investors to pick and choose the products that can serve their interests better. Perhaps investors get confused with the varied information they see in advertisements and messages put out by financial institutions.


For instance, people may be planning a home loan or an education loan or even personal loans. Would these loans qualify for any tax benefits? Or, if you are in the borderline 30 percent tax bracket, are there any avenues to reduce your tax liability. Yet again, can you invest in an insurance scheme which grants tax benefits schemes? Are there any pension schemes that qualify for tax benefits? What about investments in health insurance? Could an investor derive benefits from a tax saving mutual fund investment?


People can get answers to these questions in several ways. The government itself presents all the benefits through its income tax website and offices. The financial institutions highlight tax benefits in their advertisements, articles and guides. Media houses put out articles and broadcast programs on tax benefits. The Internet provides information through blogs from knowledgeable people on the subject. Stakeholders develop and offer apps to highlight tax benefit schemes.

Compendium of income tax benefits

In reality, there is no need for confusion as all the benefits are finite. To help you overcome any confusion we present a compendium of tax benefits that are available to you. These are put in proper perspective so that you can be absolutely clear as to what benefits you can get out of a tax saving investment options.


Income tax provisions under different sections

By going through our information base on tax benefits investors can learn about

  • Various income tax slabs and income tax limits
  • Explanations of benefits under different income tax sections such as 80C and 80D
  • Income tax exemptions under different sections
  • Income tax rebates under various sections
  • Ways to file income tax returns

Further, you will find information on various provisions of tax related to tax saving investments in

  • Fixed deposits
  • Mutual fund schemes including ELSS
  • Insurance products
  • Home Loans
  • Education Loans
  • Personal loans
  • Insurance plans

How to save tax in India?

The tax resource section provides easy to use features about various tax provisions and benefits including FAQs and blogs that supplement information provided by various government agencies. You can also find information on various tax saving schemes. Further, you will find several calculators such as the home loan tax benefit calculator that can assist you in evaluating different tax saving schemes and determine the amount of tax saving on a home loan. Similarly, you can use other calculators to ascertain education loan tax benefits.


By using the compendium, investors can get a quick glimpse of all tax benefits and use the information to plan their tax saving investments carefully. They can also learn the rudiments of the income tax filing process.


The New Year can start off well for all investors if they use the compendium judiciously. There is no hurry as there is time up to 31 March to plan and invest in instruments that give you the best returns as per objectives and goals set by you.