As the new Financial Year begins, now is the best time to save. From ways to claim maximum tax benefits to various avenues of personal savings that earn attractive income tax rebates, this guide will help you make informed choices.
During his Budget speech, Finance Minister Arun Jaitley said an individual tax payer can claim tax benefits for up to Rs. 4,44,200 in addition to the tax exemption.
No change in tax slabs for individual payers
Increased exemption limits on health insurance premium and transport allowance were announced in the Union Budget for 2015.
Public provident fund
This dependable small saving scheme offers 8.7 per cent interest per annum and comes with a lock-in period of 15 years. Part withdrawal and loan is also possible. Maturity is also exempted from IT.
Sukanya-Samriddhi
A small savings scheme through India Post for the welfare of girl child, it presently yeilds 9.2 per cent per annum. Being a long-term corpus fund, the amount matures when the daughter turns 21. Till then, you can enjoy IT exemption under Sec. 80(C).
Employee Provident Fund
The Employee Provident Fund Act is likely to be amended this year. The big change on this front is that the pension option has been withdrawn for new employees. The entire EPF corpus will be given at the time of retirement without tax deducations.
National Pension Scheme
Budget has granted an additional tax deduction of Rs.50,000 for investment in the New Pension Scheme. So start to save early, for a financially-independent post-retirement life.
Home loans
Repayment of the Principal amount in entitled for income tax rebate under Section 80 (C). Tax deducation upto a maximum of Rs. 2 lakh can be availed if the property is self-occupied. Whole interest is tax deductible incase the property is not self-occupied.
Insurance
Premiums paid on ULIP, pension plans, endowment and pure terms are exempted from tax upto Rs. 1.5 lakh under Section 80(C).
Health
Under Section 80(D) premiums paid on health insurance for self, spouse, children are tax deductible upto Rs. 35,000. Additional rebate of Rs. 20,000 for senior-citizen dependent parents.
Small Saving Schemes
The once-popular Kisan Vikas Patra is back through India Post. Small contributions in denominations of Rs. 1000, 5000, 10,000 and 50,000, with no upper ceiling on investment, will double in 100 months.
