How to save the tax amount

Shridhar Shah (Chartered Accountant in Practice) (172 Points)
Replied 30 August 2012

Hi,

First of all, your husband shall declare to his employer his future investments which can save tax. Every company provides a form / online system in which you can declare your investments, eligible expenses & HRA so that TDS deduction will be reducd.

Please declare your monthly rent & proposed investments u/s 80C & 80D to the employer & your TDS will be reduced.

Most of the companies provide detailed sheet of eligible investments & expenses in the declaration sheet itself. So you will be able to choose investment products from there in full details. Most common investments are Life Insurance Premium, PPF, Tax Saver FD, Mutual Funds & NSC.

Please make sure you invest as declared by end of January of each financial year (April to March) as most companies ask for investment proofs by that time & if investment is not done by that time, you will face grater deduction of tax in Feb & March salary.

CA Ram (CA) (310 Points)
Replied 30 August 2012

i,

First of all, your husband shall declare to his employer his future investments which can save tax. Every company provides a form / online system in which you can declare your investments, eligible expenses & HRA so that TDS deduction will be reducd.

Please declare your monthly rent & proposed investments u/s 80C & 80D to the employer & your TDS will be reduced.

Most of the companies provide detailed sheet of eligible investments & expenses in the declaration sheet itself. So you will be able to choose investment products from there in full details. Most common investments are Life Insurance Premium, PPF, Tax Saver FD, Mutual Funds & NSC.

Please make sure you invest as declared by end of January of each financial year (April to March) as most companies ask for investment proofs by that time & if investment is not done by that time, you will face grater deduction of tax in Feb & March salary.

deepak (Job) (69 Points)
Replied 30 August 2012

Madam ,

Before trying to save tax,, first of all calculate tax on annual income of your husband . As you know Upto Rs.180000/- Tax Liability is NIl 180000/- To 500000/- @ 10% And Between 5 lac to 8 lac @ 20% and beyod 8 lac @ 30% tax is to payable . HRA can be exempted from tax to a certaint limit. and Some allowances are exempt from tax.

then you can invest under LIC, 5 yr . FDR , Mutual Funds,, but upto Rs.100000/- Only.

Finaly , take consulatancy from Professional to comply with tax laws.because taxation is not so simple, there is a concept of HUF And many more tax planning concepts.Thanks

1 Like

Shridhar Shah (Chartered Accountant in Practice) (172 Points)
Replied 30 August 2012

Dear Deepak,

Thanks for providing your valuable inputs. But apperantly from details provided by Mrs. Sinha the case is related to declaration which needs to be done so as to reduce TDS amount. I shall mention that she needs to contact consultant who can suggest her more & efficient ways of planning tax as the taxable income will be on higher side.

Mrs. Sinha,

Most of times there is much more tax saving potentials & options available with salaried employees but they miss it due to lack of knowledge and timely action. You shall plan your taxation before end of each 31st March so that you can get maximum tax benefit. Also investments done for tax saving proves to be very much helpful for your secure future.

HARISH BANSAL (student) (229 Points)
Replied 31 August 2012

The income Tax slab for the Assessment year 13-14 is :

0 to Rs. 200000- 0

2 lacs to Rs. 5 lac-10%

5 lacs to Rs. 10 Lac -20%

After 10 Lac- 30%

U can invest your money in Sec 80c (like in PPF , ULIP Plan, 5 Year FD, Insurance etc.), But u can get deduction only upto Rs.100000/- . and there after it u can also invest in Central Govt. Infrastructure Bond in Sec 80CCF but upto Rs.20000/- only.And u can also get deduction of upto Rs.15000/- in Sec80D for medical Insurance Policy.

Regards,

Harish Bansal

Attached File : 716010 1047475 13 deduction.doc downloaded: 203 times

CA.Varalakshmi.M (Manager-Finance) (482 Points)
Replied 31 August 2012

Hi Harish ,

A small correction,Deduction u/s 80CCF is no more.It is applicable only for the A/y 2012-13.

And under sec 80D u can invest in mediclaim upto Rs.35000/- p.y

1 Like

Shridhar Shah (Chartered Accountant in Practice) (172 Points)
Replied 31 August 2012

Dear Harish,

80CCF is discontinued for AY 2013-14.

1 Like

CA Harshal Vora (Author of ISCA) (160 Points)
Replied 31 August 2012

Hi Tanushree

Plz chk this calculation and you will be able to reduce tax amount.

Assuming salary is from aug 12 to march 13 i.e., for 8 mnths

Total salary of 8 months (basic+HRA+AGP+DA +Transport) = 560000/-

Proposed Deduction: Rs 173480/-

1. 80 C (assuming you are investing) = 50000/- [LIC; 5 yr FDR; MF; NSC; etc]

2. 80 D (with senior citizen) = 35000/- [mediclaim]

3. Transport (800*8 mnths) = 6400/- [ no investment requird]

4. HRA per month = (10260*8) = 82080/-

a) 11400 (actual recd)

b) 10260 (rent paid - 10% basic+da) (assuming u r paying rent of 15000/-

c) 23700 (50% of basic +da)

5) 80 GG cannot be claimed coz HRA is bring claimed

So, net salary [560000-173480] = 386520/-

Therefore, tax to be deducted for 8 month = 18652/- & per month = 2332/-

Tell your husband to give all his investment details, rent details to his employer.

Regards,

Harshal Vora

Alok Srivastava (Consultant) (210 Points)
Replied 31 August 2012

HI Tanushree ,

As said by my friends, You should calculate tax payble without any planning first and then after you can plan tax payble according to provisions of Income Tax Act .There are many changes in acts for A.Y. 2013-14 :-

Deduction on life insurance policy, taken after 1 April 2012, will be allowed only if yearly premium is less than 10% of sum assured. This is a new change, earlier it was 20%. If it’s more than 10% then not eligible for deduction u/sec. 80C.

A New Section 80TTA( No tax will be charged on interest earned on balance in savings bank account subject to a maximum of Rs. 10,000 per year.)come in force from this year and so on.

So, you can take benifit from thease changes.

At the point of Investment you can invest your money in :

Life Insurance Premium, PPF, EPF, Tax Saver FD(up to 5 years), Mutual Funds, NSC, KVP(Maximum 1 lacs)

In mediclaim policy maximum 40000( If conditions satisfied)

In House property,

If you live at rent then you should take benefit of Sec 10 instead of Sec.80GG

Because lack of details i will not help you exact but i am attatching a word file that can help you in your tax planning.

Regards,

Alok Srivastava

Attached File : 520256 1047727 tax planning.zip downloaded: 274 times

HARISH BANSAL (student) (229 Points)
Replied 08 September 2012

You may also invest in Sec 80 CCG & can get deduction upto Rs. 25000 (50% of Investment Amount )

Alok Srivastava (Consultant) (210 Points)
Replied 08 September 2012

HARISH,

As per conditions laid down under section 80CCG ,deduction shall be withdrawn in case of person fails to satisfy the conditions in after availing the deduction. Suppose a person has claimed the deduction when his income is less than 10 lakh ,if his income for the next year increased from 10 lakh then whether deduction will be revered or not it is not very much clear .If it is to be revered then person who's income is near to 10 lakh have to think twice before claiming this deduction.

And for only deduction of Rs. 25000( i.e. for saving Rs 7725 Only) you lock yur money for 3 years , it is good decision ,i dont think so....

HARISH BANSAL (student) (229 Points)
Replied 10 September 2012

Alok Srivastava,

How can u say that Invsetment in Sec80CCG is blockage of money.i think it is more beneficial than investing in PPF, FD etc. And if it is not clear in Sec80CCG(If Icome will be more than 10 Lacs in next Assessment Year) then it will not ur Deemed Income.