The 11 th hour Tax planner
INCOME TAX: HOW MUCH DO YOU NEED TO PAY
The government of India imposes income tax on taxable income of individuals, Hindu Undivided Families(huf) companies, firms, cooperative societies and trusts(identfies as body of indiviuals and association persons), and any other artificial person. The tax rates are separate for each of catagories.
The tax is levied under the Income tax (IT) Act 1961, The Indian government revises its rax rates and rules through every budget depending upon its expenditure and revenue exp, enctiations.After several changes on this fronts in the Union Budget 2011, the government's recent notification on its small savings scehems have also contributed to the changes in the taxation landscape. therefore, this year your tax saving strategy should be quite different.
The biggest change is theat the favourite tax=saving instrument of risk averse investorys, the public provident Fund(PPF) has now become market linked, It will give return that 25 basis points above the benchmark yield of 10 year govenment bond. htere was also a small but significant change for senior cirizenin last years's Budget= the age limit for senior citizen was reduced to 60 from 65. A new catagory of very senior citizen (above 80 years)due to global rise in old people in various developing countries was also introduced. with an exemption limit of Rs 5 lack. See the tax slabs for FV 2011 12.
As a wise investor you need to have YOU NEED TO AN INVESTMENT PLAN . Your investment should be in accordence with your risk taking profile.,finance goals, income and existing investment portfolio. While preparing the plan, factors, retirement plan and house, among aothers hsould be taken into account.
You can avail various tax deuctions allowed for investments while formulating you frinancial plan, You should llok at your broad financial rquirenments an choose the investment avenues that help achieve your goals with or without tax benefits, Most taxpayes end up blindly investing in which ever avenue is easily available. without giving a second thought to which investment or insurance cover is most appropriate for them. A little bit of thout on this front would ensure that you maximist the benfits that ar available to you.
INVESTMENTS/EXPENDITURE ELEIGIBLE FOR TAX DEDUCTION
Investment under section 80c and 80ccd quality for deduction upto Rs 100000 max. Section 80c list out the insturment in which can invest to save taxes. All resident indivifual s and HUF are eligigbe lfor deduction under 80c
Life insurance policies; ANy premium paid towards a life incusrance cover for self,spouse and dependent childeren is eligible for annual deduction of up to r 1 lacks under Section 80c. Experts suggest having adequate lfe cove to take care of your responsibilty and eventualities.
While endowment plans helps you to create weatlh in over time and money backs are good for regular source of income while a pure life insurance policy is good for taking care of after death liability. In this sense Jevan anand is a good police with mixture of life and endowment.It is better to keep insurance and investment separate.
Unit linked insurance plans(Ulip):
Ulip offers a unique combination of life cover and, equity exposure and tax saving, if you claim deduction for an amount invested in ulip, your investment in the scheme should be atleast three year old i.e lock for a three year span to get the benefit, and premium paid for only five year , the scheme ulip require atleast 10 years to get the most out of the scheme. The return is however is depended on investment in stocks performance and stock market and debt market condition which drives the NAV(Net Asset Value) of the scheme. Premature withdrawls befor 5 years would be chargeable and exit load and deducted tax benefit would be considered as income.
Govt also had introduced pension plans which have a minimum 100 Rs investment monthly but the fund is not withdrawable until 60 years of age has attained. The benefit is Govt of India add same amount and it is deductable from tax under 80ccc
Saturday, June 02, 2012
The 11 th hour Tax planner