2/24/2015 TaxPlanning:HowtoSaveTaxlegallyin8differentways

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ecommendedRead:IncomeTaxSlabRate

Themost popularwaysofTaxPlanningwhichhelp a taxpayer to save tax legally are as

follows:

1. Save Tax under Section 80C, Section 80CCC,Section80CCDTo promote the culture of savings and to direct the savings of the commonman into the

rightfulresources,theGovtallowscertaindeductionsprovidedtheamountsavedisinvested

intheInstrumentsasspecifiedinSection80C,Section80CCC&Section80CCD.

Themaximumcombineddeductionallowedunderthese3sectionsisRs.1,50,000.Ifyouve

doneproper taxplanningduring the year, you can claim thesedeductions to save taxby

investingunderanyofthesesectionsaloneorincombinationbutthetotaldeductionallowed

wouldbelimitedtoRs.1,50,000only.

TherearemanyinstrumentswhicharespecifiedbytheGovtthroughwhichtaxplanningcan

be done and these investments can be claimed as a deduction to save tax. The most

popularinstrumentsforinvestingforthepurposeoftaxplanningtosavetaxare:

PPFAccounts

5YearTaxSavingFixedDeposit

EquityOrientedMutualFund

PensionPlans

ContributiontoEmployeeProvidentFund

LifeInsurancePolicy

NationalSavingsCertificate(NSC)

AllTaxPlanningOptionstosavetaxspecifiedbelowareoverandabovetheRs.1,00,000

deductionallowedunderSection80C,80CCC&Section80CCDasspecifiedabove.

2. Save Tax under Section 80D, Section 80DD,Section80DDB

http://www.caclubindia.com/articles/a-short-note-on-section-80ccc-of-income-tax-act-1961-9639.asp#.UUg0WBymhjghttp://economictimes.indiatimes.com/slideshow/18224192.cmshttp://www.charteredclub.com/national-savings-certificate/http://www.charteredclub.com/income-tax-slabs/http://www.epfindia.com/http://www.charteredclub.com/tax-saving-fixed-deposit/http://www.indiainfoline.com/PersonalFinance/Insurance/Tax-Benefit.aspxhttp://law.incometaxindia.gov.in/DIT/HtmlFileProcess.aspx?FooterPath=D:%5CWebSites%5CDITTaxmann%5CAct2010%5CDirectTaxLaws%5CITACT%5CHTMLFiles%5C2010&DFile=section80ccd.htm&tar=tophttp://www.onemint.com/2011/10/17/section-80c-tax-saving-instruments-infographic/http://www.charteredclub.com/what-is-ppf-account-and-the-benefits-of-investing-in-ppf/http://www.apnapaisa.com/insurance/pension-plans-india/tax.html

2/24/2015 TaxPlanning:HowtoSaveTaxlegallyin8differentways

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TheIncomeTaxActalsoallowsfordeductionstosavetaxiftheexpenditurehasbeenmade

bythetaxpayerforinsuringhisownhealthorthehealthofhisrelatives.Differentamountof

deductionsareallowedundereachofthesesectionswhichhelpintaxsavingdependingon

thetypeofInsurancePolicywhichisasfollows:

Section80D:MedicalInsurancePremiumofSelforSpouseorChildren

Section80DD:MedicalTreatmentofHandicappedDependents

Section80DDB:TreatmentofSpecifiedDiseases

3.TaxPlanningthroughHomeLoanIf you have taken a Home Loan, you are allowed to claim deduction for repayment of

principalamountofhomeloanu/s80C.

Moreover, you are also allowed to claim deduction of interest paid on home loan

undersection24.Themaximumdeductionallowed in somecases isRs.2,00,000and in

somecasesthereisnomaximumlimitofclaimingthisdeductionforpaymentofintereston

homeloan.

TaxplanningforthepurposeofsavingtaxbytakingaHomeLoanishighlyadvisableasthe

Deductionallowed for repayment of home loan canbe claimedunder 3 different sections

resultinginhugetaxsavingstothetaxpayer.

http://www.vakilno1.com/bareacts/incometaxact/s80ddb.htmhttp://law.incometaxindia.gov.in/dittaxmann/incometaxacts/2005itact/section24.htmhttp://www.charteredclub.com/section-80d/http://incometaxindiapr.gov.in/incometaxindiacr/incometaxAct_index.jsphttp://law.incometaxindia.gov.in/DIT/HtmlFileProcess.aspx?FooterPath=D:%5CWebSites%5CDITTaxmann%5CAct2010%5CDirectTaxLaws%5CITACT%5CHTMLFiles%5C2010&DFile=section80dd.htm&tar=top