Tax-planning at the end of financial year

The financial year will come to close in another 15 days. Many people are presently checking whether they have completed maximum deduction permisible under Section 80C, i.e., Rs. 1,50,000/-. If anyone has not completed it yet, what should he/she do now?

Ideally tax-planning is a process which should be carried out systematically through out the year. However, if anybody has not done it so far, he/she should take the following steps:-

(i) If the tax-payer is above 50 and is risk-averse, he/she may put more money in PPF. PPF is safe, gives a fairly good return and is entirely tax-free.
(ii) If the tax-payer is relatively young and is ready to take risk, he/she must invest in ELSS for long-term benefits. It gives maximum return among tax-saving instruments over a long run.
(iii) People must avoid the temptation of hastily subscribe to new insurance policy/policies at the end of the financial year. They must remember that insurance is not an investment. They must not fall in the trap of insurance agents at this time of financial year.
(iv) People should subscribe to NPS and avail another additional tax benefit of Rs. 50,000/- under Section 80CCD.

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