10 Tax Planning Ways for A.Y. 2016-17
Posted on September 30 2020
As the new Assessment Year has approached, all the tax payers have started focusing upon their tax planning. Section 80 of the IT Act of India has been serving as a boon for the tax payers. This section offers various forms of deductions which a tax payer can use to claim while they are filing their return for a particular AY.
Some of the best ways are suggested below where you can pay minimum tax and create a pool of savings for yourself. The top 10 tax planning ways which can help to gain in AY 2016-17 are:
Consider deductions Under 80C
The section 80C mainly deals with the offers of deductions to tax payers who have invested in sectors like Fixed Deposits for 5 years, PFF, Pension plans, EPF, etc. The main scope of this deduction which will allow the tax payers to claim their deductions upto Rs. 1, 50, 000 for the AY 2016-17.
Use NPS Under 80CC
The term NPS represents New Pension Scheme. Recently, the Government of India has introduced this scheme with a view to create better saving habits amongst all the tax payeRs. Investing in the NPS which will allow the tax payers to claim a deduction of Rs. 1, 50, 000 in the AY 2016-17. Therefore, if a tax payer withdraws from such investment plan then the same will become taxable.
Medical Insurance Under 80D
Your concern for the health can increase your wealth! The IT Department offers a deduction of Rs. 25, 000 for the tax payers who invest in the Medical Insurance. If you are a senior citizen then this advantage is extended to Rs. 30, 000.
Note: Deduction for the medical insurance premium etc. u/s 80 D raised to Rs. 25,000 and Rs. 30,000 in case of senior citizens for A.Y.2016-17.
Help Disabled Dependents Under 80DDB
Taking care of a disabled person at home can become a burden. Therefore, the Government of India is offering assistance to you by allowing you to claim a deduction of Rs. 80, 000 per AY in respect of the expenditure borne for taking care of the disabled person.
Repay Higher Education Loans Under 80E
Are you still carrying the burden of your higher education loan? Under the Section 80E, the Income Tax Department will allows you to claim a deduction upto Rs. 1, 00, 000 towards the loan repayment in respect of higher education.
Charity Under 80G
Charity can be a good area for you to claim for the deductions. Numerous charitable organizations accept the donations from common men and donating money to one of such organizations can allow you to claim 100% deduction. All that you are required to do is maintain a proof of your donation.
Note: Deduction u/s 80G up to 100% for the donation to Swachh Bharat Kosh, Clean Ganga Fund and National Fund for Control of Drug Abuse.
Payment of Interest for House Building Loans Under 24B
The significance of this section is mammoth! Under this section, a tax payer is qualified to claim a deduction of Rs. 2, 00, 000 as the interest on house loan. Additionally, the purview of the section 80C can also be combined here, which offers an additional deduction of Rs. 1, 50, 000 for House Building Loan’s principal amount. In total, you can claim a deduction of Rs. 2, 50, 000 for the purpose of meeting your house addition costs.
Transportation Allowance Under 10
The lesser known area of the deduction is Section 10. Under this section, a tax payer can be easily claimed as a deduction of Rs. 19, 200 as his transportation charges. If a person is physically disabled then the advantage of this amount increases to Rs. 38, 400.
Know your taxable income
Apart from searching for deductions and making adjustments in your expense column, you should also plan to compute your right taxable income. Collect all the revenue and the expenditure sources and figure out the correct tax amount which you will be paying for the AY 2016-17. In case, if you require any kind of help, feel free to contact an expert.
Pay your taxes on time
Last, but not the least, pay your taxes on time. It is important to pay your taxes before the due date as it helps you to get refunds faster. If you are not paying your taxes on time, then the issues such as the interest on the refunds and the penalties may increase your tax liabilities.
Tax Assist is a professional income tax consultancy in India for both corporate houses and individual tax payers; the latter comprising Salaried Individuals, Seafarers, Professionals and Non Resident Indians.
With the help of Tax Assist and its team of income tax professionals, taxpayers can minimize their Income Tax liability, maximize their net income and create opportunities to save for current and future needs while maintaining proper accounting standards and income tax returns which are compliant with the Law.