New tax year: starting today, tax planning will save more money
The 2018-19 fiscal year has begun. In such a situation, if your annual income is more than Rs 2.5 lakh, then you should start planning your taxes immediately. Under the current rules of the Income Tax Act, the income is more than Rs 2.5 lakhs per year.
If you do a job, then it is also important that you do this. Companies ask about their investment plan in April. If you do not give this plan, then the company will start cutting TDS in your revenue. If you start planning your taxes early, you will have more money to save or invest and you will have to pay less.
Tax Planning
Tax planning is very important at the beginning of the financial year. This gives you plenty of time to invest in tax savings. This allows you to invest a little in tax-saving options for the entire year. At the same time, if you fall behind on tax planning, you’ll have less time to invest in tax-saving options later. It is not possible for each person to invest more in less time.
It will save more money than tax planning
Tax planning strengthens your financial position. If you do proper tax planning, you’ll have more money to save, invest, or spend. Along with this, you have to pay less tax. For tax planning, first of all, you need to know what your tax liability will be on your annual income.
Don’t just save taxes
You should not only invest in saving taxes. For example, people only buy an insurance policy to save tax, while they do not understand what are the features of this policy or how much they will get in the policy. If you don’t get coverage or reimbursement according to your needs in the emergency, then it can be costly for you.
starts soon
The most important thing in tax planning is to start early. Understand your tax liability. Set your long-term and short-term financial goals. After this, select the best investment option to achieve your financial goals. After that, start investing.
Start investing in Savings Plans Linked to Variable Income
If you have to invest in the Equity Linked Savings Plan, then you should start investing immediately. There is no investment tax in the Equity Linked Saving Scheme. However, you should be aware that the lock-in period on the stock-linked savings plan is three years.
public provident fund
The public provident fund, that is, the PPF, is also a great option to save taxes. You can invest a maximum of Rs 1.5 lakh in a year in PPF. However, when investing in PPFs, you should know that if you can invest for a longer period, just add money. The PPF account is for 15 years.
health insurance
There has been a change in the income tax laws regarding health insurance in the new tax year. According to this, if you buy medical cover for your wife, parents or children, you will get tax exemption on annual premium up to Rs 25,000. The tax exemption limit on the first health insurance premium was 15,000. In this case, if you haven’t bought health insurance coverage for yourself or your family, buy it now.