Get your investments planned for FY 2015/16

March 31 has passed by and now marks the beginning of a new financial year. Most tax payers start worrying about getting their paper work for the past year instead of focusing on the year ahead. Planning at the beginning of the financial year itself will put your mind at ease with ample amount of time to invest during the rest of the year.

The Income Tax details and payments for the past year (2014/15) need to be submitted by July 31, 2015, and you should not lose out on what you need to plan ahead. Wasting time would end up in investing more money each month. So why delay? Below are a few places where you can invest your hard earned money and save on tax with the maximum to your benefit.

Below are some smart investment methods (at the beginning of each Financial Year) to help save on Income Tax at the end of the Financial Year.

• Invest using Section 80C: This can benefit you by exempting tax with up to Rs 1,50,000 per year. Invest in any, or all of the following: PPF, Life insurance, NSC, ELSS, five-year FD’s with banks and post offices, Tuition and school fees.
• Insurance: After exhausting the Rs 1,50,000 benefits on Section 80c, you can additionally prevail benefits from Section 80D with personal medical insurance of self and immediate family members. This section can help you with another Rs 25,000 to Rs 30,000 (senior citizens) each year. The Income Tax department also allows one to save tax under sections 80D, 80DD and 80DDB. These include expenses made by the tax payer for medical insurance for health of self, spouse and children (80D), medical treatment of handicapped dependants (80DD) and treatment of specified diseases (80DDB).
• Benefit by making donations: Under Section 80G, you can also get benefits by spending for charitable organizations with a proper 80G certificate from them.
• HRA: usually HRA is a part of your salary structure. However, if not, you can claim for HRA under Section 80GG.
• House loan benefits: If you have a loan on your house, you can also save on tax by submitting your loan documents and receipts of the EMI. You can benefit by up to Rs 1,50,000 on the principal component paid each year. This too gets covered under Section 80C.  
• LTA: Usually another part of your salary structure. This can be availed only once every two years. Make sure you present proper bills and tickets for each travel you made with your family.
• Tax on bonus: Usually a completely taxable amount, and nothing can be done about it. However, if you can speak to your employer about deducting the tax for the bonus to spread it across each month rather than it hitting you at the end of the financial year, it would be helpful.
• TDS: Tax Deduction at Source is what each company practices. Make sure you present all your investment details to your employer by mid April so that the company does not deduct tax each month. If you plan an investment later in the year and have not informed your employer well in advance, you would have to claim the deducted tax from the Income Tax department after filing your returns at the end of July. Hence, plan your investments well in advance so that you don’t get your tax deducted at source each month. Give your employer all details of your home loan, insurance, and any other investments beforehand.
• Educational loan: Tax can also be saved on educational loans. Section 80E helps the tax payer with interests on the loans acquired for education of himself, spouse and children. Do note: The principal amount of the loan is not covered here.   
• Property: If you have property to be sold, make sure you reinvest the amount you obtained into specified instruments to avoid being taxed.
• Restructure your salary (if possible): This may not be possible with all companies, but if yes, you are a lucky one. If you are good with your HR, you could request in restructuring your salary from the company. This could help you save a huge chunk from your TDS. Opt for food coupons instead of lunch allowances. Check with medical insurance from the company, if not already on the list. Ask for allowances such as transport, education, attire, telephone, fuel, etc, and include them into your salary structuring. If you manage to get these done, make sure you present actual bills at the end of the year.

In order to save on tax, make sure your investments are well planned with accordance to your salary and savings. Don’t over-invest, you may find it tough to make payments and in turn end you with either less money in hand or too little savings. If you plan to pay the tax rather than make investments, you would end up with almost no savings at the end of your term. So plan it well, plan it well in advance and plan it intelligently, to save the most on your income tax.