Tax Saving Plan: Before investing, you should see where you will get the highest return. With this, how much tax are you saving? You should invest only after seeing all this. By investing in a good place, you can earn big profits for tax savings.
Every person should save in his life. By making small savings, you can achieve your- financial goals. In this episode, you will tell you where you will benefit in tax along with the best returns on investing. Benjamin Franklin rightly said – Death and taxes are the only two things in life that are certain. The former cannot be avoided, but we can strive to reduce the tax burden and increase investment returns. This is the first and foremost smart step that can be done to get maximum return on one’s investment.
Earning Strong With Tax Savings
Tax planning is an important aspect when it comes to saving on returns. If you are planning to invest in tax-saving investments like PPF and ELSS, more time is needed. If there are changes in your status, such as change in rental agreement (HRA), consider these and inform the employer about the TDS.
Invest in the name of parents and spouse
A great option to avoid income clubbing is to invest in the names of your parents or grandparents and spouse who may be in lower tax brackets. Bansal explains, if one of your parents is above 65 years of age and does not have any investments, you can make investments in their names to earn tax-free interest. Every adult above 60 years of age is already entitled to a basic exemption of Rs 3 lakh. Additionally, if you want to take the help of a grandparent who is above 80 years of age, the exemption is more than Rs 5 lakh.
Invest in the name of children
Your children can help you save tax like your parents. But this will happen only if your child is an adult i.e. above 18 years of age. A child is treated as a separate person for tax purposes once he becomes an adult. He will also be eligible to open a demat account and invest in stocks and mutual funds with the money gifted by you. Bansal says, long term capital gains up to Rs 1 lakh will be tax free every year. Whereas short term capital gains will be tax free up to a standard exemption of Rs 2.5 lakh per annum.
NPS is a good option NPS
can be a good option for your retirement money in India with low annuity rates and long term. Experts say that NPS has been considered an unattractive investment option. According to Bansal, the reforms in the NPS withdrawal rules have brought about some change. Thereby, the pension scheme has become more attractive in their 50s. The new rule could be a somewhat different tax-saving option for investors.
