You missed the June 30th, 2015 limit and now the 31 March deadline to file your income tax returns is fast approaching. Tax planning is high on the agenda however several taxpayers are yet to complete their tax planning for the year. The desire to make hasty tax saving turns makes them prime prey for devious financial advisers who capitalize on the approaching deadline to sell off high-cost investment plans to the less informed and ill-timing investors. Section 80C of the income tax Act allows for an income exemption of up to Rs 150,000 used in certain investments. Here are a few quick tips to help you close in on your tax saving investments limit.
Tuition Fees Paid
Many parents of school going children are not aware that they can take care of a sizeable portion of their investment requirement by including tuition fees paid on their returns. Section 80C allows for the deduction of tuition fees paid for up to two children.
Home Acquisition Costs
If you acquired a home during the year under review, the registration charges paid, the principal portion of the home loan EMI and the stamp duty paid for a house bought during the year are all eligible for the deduction under section 80C, eating into more of your allowable investment limit.
Contributions to Provident Fund
Any contributions made towards a retirement plan such as Employer Provident Fund or the National Pension Schemes are eligible for deduction as investments under section 80C, further reducing your limit.
Premiums Paid on Existing Insurance
Whether they are health insurance or life insurance, payments made as premiums for insurance policies during the year in review are included as qualified deductions under section 80C of the income tax act. This will further narrow your limit.
The aforementioned quick tips will help you narrow in your tax deductible investment limit. Thereafter it is prudent to first calculate how much more you need to invest as qualified for deduction and make an investment choice suitable and affordable to you.