As we heading towards the end of financial year 2012-2013, there is no room for procrastination now. If you do not plan your taxes now, you will end up paying a hefty sum.
As a late planner, you will not get the maximum benefits from tax-savings instruments due to the notional loss in investment, but you can minimize the damage. For most of the people “Tax-Saving” brings to mind life insurance, Equity-linked saving scheme, NSC etc. under section 80-C of the Income-Tax Act. An individual can claim tax deductions of upto Rs. 2 lakh under 80C.
There are quite a few options you can opt for tax savings:-
- Life Insurance Premiums.
- Contributions to Employees Provident Fund.
- Public Provident Fund.
- NSC (National Savings Certificates).
- Unit Linked Insurance Plan (ULIP).
- Repayment of Housing Loan (Principal).
- Equity Linked Savings Scheme (ELSS) of Mutual Funds.
- Tuition Fees including admission fees or college fees paid for full-time education of any two children of the tax payer.
- Education Loan.
- Donation to any registered charitable organisation.
- Any short-term capital loss.
- A Physical disability.
- If you have any ill dependent to look after.
- Infrastructure Bonds issued by Institutions/ Banks such as IDBI, ICICI, REC.
- 5-Year fixed deposits with banks and Post Office Savings Schemes.
- Senior Citizens Savings Scheme (SCSS).
- Investing in National Pension System.
- House Rent payment.
Small piece of advice:- These are the widely used investment plans now a days. If you are a risk taker then go for 100% MF, if you are a moderate risk taker then go for 60% MF, 20% PPF and 20% FD and if you do not want any risk then go for 100% PPF, FD and/or NSC.