All of us engage in an economic activity and work really hard to make a living. In order to make a living, it becomes imperative for us to work a little harder and also smarter to save our taxes. Often we get to see that many individuals keep their tax-planning exercise pending till the eleventh hour. They prefer splurging on things of materialistic interest which leads them to sub-optimally save tax.
Therefore, today through this article we, MoneyMindz will guide you by giving simple tips of saving taxes. Our Smart Financial Advisor, Kuber Mindz is always ready to give you financial assistance in any financial matter at the earliest.
As a law-abiding citizen, you ought to pay your taxes on or before time each financial year. Tax Planning is an exercise performed to meet your tax obligations in a systematic manner keeping in mind your current financial status. Further, it includes your larger financial plan after calculating your age, financial goals, risk appetite, and investment horizon.
With proper tax-planning you can aim to reduce your tax liability and protect your hard-earned money.
Let us look at these five simple steps to save tax:
Income from trading your dwelling
If you wait for two years after purchasing the house to sell it, it will be treated as long term capital gains. Thus, it will draw a lower rate of tax, 20% with indexation assistance.
You can assert abatement up to Rs 25000 (Rs 50000 if a senior citizen is covered) under Section 80D for medical insurance compensated. By insuring your parents, you can receive added allowance of Rs 25000 (Rs 50000 if they are above 60). If premium is paid on your policy furnishing cover for more than a year, the deduction will be allowed on reciprocal basis.
Dividend acquired on Mutual Funds
If your dividend income exceeds Rs 10 lakhs from shares, you ought to pay a flat rate at 10% on it. Dividends earned on Mutual Funds are tax free.
Tax free compensation
Telephone bills and internet bills paid by your employer isn’t taxable for you.
After 5 years of repeated service, gratuity received is qualified for exception up to Rs 1000000. This exception is the aggregate of all gratuity payments collected by an entity in his lifetime.
Tax Planning exercise is as crucial as you plan for your other financial goals. And remember to commence your “tax planning” exercise well in advance and complement this with your overall investment planning exercise. MoneyMindz suggests that by adapting the above methods of tax-planning, you not only ensure long-term wealth creation, but also protect your capital. It will enable you to save more through tax planning and fulfil many of your dreams in life.
For more information visit www.moneymindz.com or give a missed call to 022-62116588.