Tax Saving Investment Planning for 2015-16 Financial Year

Tax Saving Investment Planning for 2015-16 Financial Year

With the financial year 2015-16, taxpayers to focus on their income tax planning. Section 80 of the Income Tax Act, 1961 provides several beneficial ways through which taxpayers can reduce their tax liabilities.

Here are some helpful ways to reduce your income tax liability.

These guidelines will also help to significantly increase your savings and Investments

1. Deductions under Section 80C..!

This section mainly pertains to the provision of deductions to taxpayers investing in certain types of investment avenues.

These include fixed deposits for 5 years, employer provident fund (EPF), pension plans, public provident fund (PPF), ELSS and other 

national pension system (NPS).

The current tax benefit available under this section is up to Rs. 1.5 lacs during the year.

2. NPS Tax Benefit..!

The new NPS is new kind of national pension system available for 

taxpayers in the government as well as the private sectors.

In 2009, the government launched this scheme, which is mandatory for state and central government employees. It is also extended the benefit to private sector employees with the objective of improving saving habits among individuals. 

The NPS tax benefit available is Rs. 50,000 under section 80CCD of the Income Tax Act.

Combining the two sections (80C 80CCD) and  above, taxpayers 

can now claim tax deductions on up to Rs. 2 lacs (Rs. 1.5 lacs under section 80C and Rs. 50,000 as NPS tax benefit under sec 80CCD).

Further, if employers contribute to the NPS on behalf of employees, additional tax deductions are available under sec 80CCD (2).

There are many national pension system calculators that are available online, to better understand possible tax savings using this plan.

3. Medical Insurance Premium..!

Another one of the tax saving schemes available is through medical insurance plans. Premiums up to an amount of Rs. 25,000 can be used as tax deductibles, under section 80D. For senior taxpayers, the limit is set at Rs. 30,000.

An additional tax deduction of up to Rs. 80,000 per assessment year is available for taxpayers who incur expenses taking care of disabled individuals.

4. Higher education..!

An amount of Rs. 1 lac can be deducted from your income tax liability under section 80E for repaying loans availed for higher education.

These tax benefits will allow you to put aside more funds for investments, thus giving you even greater returns. 

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