Things to Know for 2019’s Tax Planning and Savings

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As the end of this calendar year draws closer, salaried individuals and self-employed business professionals start
to plan their tax filing process. Apart from the mundane planning for tax filing, it is wise to prepare for better
savings. That starts with knowing about deductions permissible under the Income Tax Act.

Below are a few brief points on deductions under Sec 80C and Sec 80D of the Income Tax Act to reduce the
taxable amount from income:
  1. Investments up to Rs 1.5 lakh on fixed deposits (5years term period), Public Provident Fund (PPF), National Saving certificate, National Pension Scheme and ELSS funds.  This is one of the most common investments made for tax saving by salaried individuals as well as HUFs.
  2. Purchase of medical or health insurance and claims worth Rs 25, 000 and Rs 50,000 for senior beneficiaries.
  3. Interest paid for home loans can be claimed up to one lakh under Section 80C and the interest amount can be deduced and claimed from income from house or property.
Once, the tax saving plans are sorted, the next step is to plan investments to be eligible for any of the deductions
under section 80C, 80CCC, and Section 80CCD as well as Section 80D, Section 80DD and Section 8DDB.
In case an individual has expenses for his own healthcare or that of his relatives or family members, he/she is
eligible to claim for deductions Section 80D, Section 80DD, and Section 80DDB.
Section 80D includes payment of medical insurance premium of self or spouse or children. Whereas Section
80DD allows individuals to claim for the medical expenses and treatment charges of handicapped dependents.
Whereas Section 80DDB allows claims on expenses made for the treatment of specified diseases.   
Apart from the above general scenarios for the tax planning and savings, a taxpayer is also eligible for the below
deductions:
  • Payment of Educational Loan: If the taxpayer had earlier applied for an educational loan or is the spouse or legal guardian or parent of an individual who has taken a student loan, he/she can claim HUFs.
  • Investment in Shares and Mutual Funds under Rajiv Gandhi Equity Saving Scheme: An individual who earns less than Rs 12 lakhs PA, is eligible for additional deduction under Section 80CCG if he/she invests in shares and mutual funds of certain companies.
  • Re-investment of Income from Long-term Capital Assets: Owners of long-term capital assets like real estate can be exempted from the payment of tax on capital gains by re-investing the profit amount from the sale of property or asset in financial instruments.
  • Donations Under Section 80G: Charitable donations and contributions made through cash or cheques towards National Relief Fund are exempted from taxable amount.
For more information on Tax Planning, Savings and Investments, Join our advanced taxation courses in Ahmedabad.

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