Smart Tax Planning

Taxes are a mandatory contribution to state revenue, levied by the government on citizens' income, businesses' profits, or goods and services consumed.

Tax saving is the process of reducing the amount of tax that is payable on income, profits or gains. Methods of tax saving include expenses that are deductible for tax purposes, investing in tax-advantaged savings vehicles and taking advantage of tax exemptions and reliefs.

Tax saving plan allows us to lower our taxable income so that we don’t pay as much in taxes as we would if we put all of our money toward things like day-to-day spending and investing. But how should plan it? What are some smart ways to save tax rupees? Here are some investments to make when planning your tax savings:

• Tax Saving Investments: Select the right tax saving instruments like Public Provident Fund (PPF), National Savings Certificate (NSC), Equity Linked Saving Schemes(ELSS), Sukanya Samridhi Yojana (SSY) etc.
• Schemes: Save tax by investing in income tax saving schemes like National Savings Certificate, Senior Citizen Savings Scheme or National Pension Scheme ( NPS )
• Credit and Deductions: Determine credits and deductions you can claim. Like Donation, Medical Expenditure, Insurance Premium, Home Loan, Loan for Higher Studies, House Rent Allowance etc.

In India, taxpayers can take advantage of a number of popular schemes to save on taxes. Perhaps the most well-known is the Public Provident Fund (PPF), which offers tax-free interest on deposits up to Rs. 1.5 lakh per year.

Another popular option is the Sukanya Samriddhi Yojana, which provides tax-free interest on deposits made for the benefit of a girl child. Employees can also save on taxes by investing in the Employees' Provident Fund (EPF), which offers a variety of benefits including retirement planning and medical insurance. Lastly, taxpayers can claim deductions for expenses such as charitable donations and medical costs.