Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: cpt :: list of goods taxed at 4% :: VAT RATES :: articles on VAT and GST in India :: ACCOUNTING STANDARDS :: VAT Audit :: TDS :: form 3cd :: ACCOUNTING STANDARD :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: TAX RATES - GOODS TAXABLE @ 4% :: due date for vat payment :: empanelment :: ARTICLES ON INPUT TAX CREDIT IN VAT :: Central Excise rule to resale the machines to a new company
News Headlines »
 CBDT releases Income Tax Return statistics for last two fiscals
 CBDT issues second round of Certificates of Appreciation to tax payers for their contribution towards Nation building
 FinMin looks at cut in corporation tax
 Draft Rules for prescribing the method of valuation of fair market value in respect of the trust or the institution-Chapter XII-EB of the Income-tax Act, 1961- reg.
 India is moving towards a flawed GST
 ICAI to organise two-day international conference in Hyderabad
 Here's how to calculate tax payable on your capital gains
 Income Tax calculations for the financial year 2016-17
 CPE Events 17 October - 22 October 2016
 High Court raps I-T Department for wrong tax demand
  CBDT signs 5 advance pricing pacts with Indian taxpayers

Taxed? Here's a savings grace
December, 28th 2006

While there are many people who are despairing the lack of resources to make tax-saving investments, there are others looking for every tax-saving opportunity. Here are a few issues both categories of people need to keep in mind to get the best out of tax provisions.

Choose instruments wisely: Making investments in eligible instruments certainly saves on tax. But, that is not a good enough reason to choose an investment since there are different lock-in, return and tax implications with each instrument. All these return and lock-in conditions are well documented. But, along with returns, also look at your cash flow needs. If you think you will definitely need a defined sum of money after three years, it may not make sense to go in for a product like PPF with a long lock-in or a relatively riskier product like an equity-linked saving scheme. Similarly, insurance is a long-term commitment; dont choose a low-yielding 20-year policy for the sake of immediate tax breaks.

Investment is not the only option: This is important for those with not enough money to make additional investments. Investments are just one way of getting tax breaks. Section 80C also permits one to claim expenditure incurred on tuition fees for up to two children to be included. Also permitted is deduction on account of repayment of principal on a housing loan. So, if you already have these payouts, alter additional investment needs accordingly. That there are no internal limits in the overall Rs 1 lakh limit for this section certainly will be helpful. And, dont forget to consider in your calculations the contribution you will cumulatively make to your provident fund account during the financial year.

Life beyond Section 80C: The section has an overall limit of Rs 1 lakh, which most have no problem of exhausting. Almost everyone can look to exploit the Rs 10,000 Section 80D limit on account of premium towards a health insurance policy. People with handicapped dependents (Section 80DD) or with expenditure on specified diseases (Section 80DDB) can claim further tax breaks. Then of course, there is the well known deduction available on account of interest on home loan of up to Rs 1.5 lakh per annum.

Remember conditions attached to each investment: Taking the tax break is the easy part. Sticking to the investment is more difficult. For instance, the provisions of the section specify that if the house property on which principal repayment deduction is obtained is transferred before five years from the date of possession, then no further deduction will be allowed. Further, the aggregate deductions allowed in the past will be added to the income of the current year and taxed accordingly. Each individual product too, such as an insurance policy, may have its own pre-mature withdrawal penalties. Find out the conditions from your chartered accountant and financial advisor before committing yourself to a new investment or withdrawing from an investment on which tax benefits have been claimed in the past.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Website Ranking Website Ranking Company Website Positioning Alexa Ranking Website Promotion Website top 10 ranking website top 10 promotion search engine result promotion Strategic Internet Marketing Website Optimization Website Ranking Factors

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions