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  • Category: Miscellaneous

    Is it already delayed? Don't delay tax planning further


    Scrambling at the last minute to invest in order to save on taxes? Here are some tips for planning on saving tax early.



    The financial year started on 1st April. Ideally, we should have started tax planning immediately at the beginning of the financial year. But generally, most of us don't do this. We believe in last minute investment for the purpose of tax saving. The insurance agents know this tendency. The agents selling other financial products are aware of this habit. The mis-sell many unsuitable products to us at the last part of the financial year. I have seen many people purchasing a new policy at the last quarter of every financial year, as advised by the agents.

    Have you done your tax planning properly? Have you saved Rs. 1.5 lakh under Section 80C? Have you availed the benefits of Section 80D (health insurance)? Have you invested in NPS for additional tax benefits under Section 80CCD? Have you collected your rent receipts? If you have left a job during this financial year, collect Form-16 from your previous office.

    It is already delayed. Don't delay it further.
  • #656847
    A timely alert message from Mr. Partha to benefit. Yet there is time to act. I shall plan it in February 2019, just 30 days prior to the end of the financial year 2018-2019.
    No life without Sun

  • #656851
    From the response of Mr. SuN it seems that the purpose behind raising this thread is not fulfilled. Take the necessary steps as early as possible. Don't wait for February.
    Come on, have a fight. Don't shoot and scoot.

  • #656856
    As said - A stitch in time saves nine - this post is really an alert for those who want to take tax rebates and benefits under section 80C of the income tax. As all of us are aware that there are certain investments where the Income Tax departments gives rebate up to an overall investment of Rs 150000 in a year.

    There are many investments which are categorised under this facility like PPF, LIC, Post Office NSc, contribution towards pension, Sukanya Samriddhi Yojana, ELSS, 5 year tax saving FD, stamp duty and registration charges, home loan principal repayment etc etc.

    Many people will be able to take this advantage of limit of Rs 150000 and even after that there are other sections where one can get further rebates. For example if you are contributing to the NPS (National Pension Scheme) then a further deduction limited to a maximum of Rs 50000 in an year can be availed.

    Now one should assure to bring all these investments to the notice of their respective finance sections wherever one is working and should also keep the documentary proof of those investments as sometimes the finance department will insist to see and verify before giving you that benefit.

    Anyway, in the extreme case if you have forgotten to mention that and miss this opportunity then later on, by July 2019, file the income tax return and show all these investments there and you will get the refund of excess tax deducted and deposited by your employer in your respect in the Income Tax department.

    This is an important work that we have to take care at this time of the year and I thank author to remind all the concerned people about this.

    Thoughts exchanged is knowledge gained.

  • #656859
    For every tax payer it is necessary to plan his income tax as early as possible. For salaried employees the employer will deduct tax composted as TDS and pay to government. So whether we have to pay more or less in the ending months is to be decided and inform them accordingly.
    I have already planned by eligible deductions and accordingly I informed my employer about the deductions. 80C, 80D, house loan amount exemptions are planned. The deductions in these three will be calculated by my employer and he will do the needful.

    drrao
    always confident

  • #656861
    A timely note by our senior member who is not only a good historian but also a financial wizard. Thanks for this as this is the most important task to be taken care of at this time every year. For the retired people like me it may not be relevant but yes we have to show all these investments in our I T return to get the benefits out of it.

    Those who are in active service should in time submit these details to their employers so that everything is taken care at that level only. Even the income from some other sources can be reported in the form 16 declaration by the employees. One has to check it with one's employer.

    Knowledge is power.

  • #656871
    I feel very embarrassed if I am called a historian. I studied history upto Xth Standard although I have a deep-rooted love affair with the subject.

    I am also not a 'financial wizard'. But I try to remain aware of basic financial information.

    Come on, have a fight. Don't shoot and scoot.

  • #656889
    For this year, plan and prepare but do not implement plans till the interim budget is announced in Feb first week. This being election year, there is high probability of some changes for tax-payer's advantage.

  • #656952
    #656889:
    Whatever the Govt is going to announce in Feb'19 will only be applicable for FY 2019-20 (AY 2020-21) and will not be applicable to the current year. So that is not relevant presently and one should invest as per existing benefits.

    Please take actions in hand and do not wait for february.

    Knowledge is power.

  • #656962
    A nice thread by the author that came just on time. It is always necessary to have an investment plan at the beginning of the financial year and many people have the habit of doing it at the last moment, as the author correctly mentioned here, that at times may not bear the intended results.

    While investment is important to save on taxes, one should also look for the growth of the investment. Therefore, the longer the period of suitable investment the better is the prospect of return. The tax benefits under different sections are mentioned here again to remind us which sections we missed. This thread serves as an alert and contains the guidelines for all.

    Sankalan

    "Life is easier when you enjoy what you do"

  • #656966
    #656871:
    That was my sincere observation based on my last 2 years association in ISC reading your articles and posts. Did not have any intention to embarrass or anything like that.

    Knowledge is power.

  • #656968
    What Mr. Umesh has stated in response to the comments of Mr. Bala is correct. Any change in the IT Act will be applicable from the next financial year, not from the current financial year.
    Come on, have a fight. Don't shoot and scoot.

  • #656986
    Would investing in National Savings Certificates (NSCs) be a wise move? What is the current interest rate on it? Is it mandatory to submit Aadhar for it?
    When you make a commitment, you create hope. When you keep a commitment you create trust! ~ John C. Maxwell

  • #656990
    Currently, the rate of interest is 8% for the quarter 1 October 2018 to 31 December 2018 (annually). The new interest rate from the quarter starting from 1st January will remain unchanged. For a bigger amount, the Post Office may demand AADHAR Card. As this is in paper format, I don't prefer holding NSC. I prefer PPF because I can maintain/check my PPF Account online. Further PPF is entirely tax-free, whereas the interest in NSC is not. This instrument comes with two fixed maturity periods – 5 years and 10 years. There is no maximum limit on the purchase of NSCs, but investments of up to Rs 1.5 lakhs in the scheme can earn a tax break under Section 80C

    Finally, at the time of maturity, the investor has to visit the same Post Office.

    Come on, have a fight. Don't shoot and scoot.


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