80C – didn’t see? - Tax saving for the Late Lateefs

The new year is here and along with the cheer comes in the customary HR E-email –

“Please submit your investment declarations for the year to save on tax deductions”

Much as you’d like to ignore that ominous outlook item, you cant ‘cos you know they’re gonna rip you off completely next month if you don’t submit your investment proofs.

But hang on – Investment kiya kisne hai??

Every year I see my close and not-so-close people, including some in my own profession, struggle with this basic hygiene item. They know it’s gonna save them butt-loads of money to be conscious about this but it’s forgotten as soon as the Financial year is through.

The “next year I will plan this better” NEVER comes for this poor checklist item.

Anyways, long story short. Now you are rushed and you wanna just hear what you can do to get out of this mess, this year.

So here goes. Bullet points to keep it simple.

 

 

(i)The 80C investments  - In order of preference and convenience

Limit is 1.5 lacs

EPF -- EMPLOYEE PROVIDENT FUND – Company deducts this every month

HOME LOAN PRINCIPAL – Just call for the Provisional certificate from your Loan company/bank. The breakup of Principal and interest is shown. Claim the Principal

ELSS (Equity linked savings scheme) – It is a 3 year lock-in equity mutual fund. Any bank or broker or CA will do it. Ask for Reliance, Franklin, Birla, DSP or ICICI as the fund-house

TAX SAVING 5 YEAR FD – Any bank does it

PPF (PUBLIC PROVIDENT FUND) – Any bank does it

ULIP or any other insurance plan – Any insurance premium that you are paying for yourself, biwi, bachha. If no policy already, avoid this!

KID’s school fees – Even if your child is hopeless, the taxman will give this benefit to you

NSS (NATIONAL SAVING SCHEME) – Go to the post office

KVP (KISAN VIKAS PATRA) – Post office again

(ii)The additional deduction – Mediclaim premium

Whatever you are paying for mediclaim upto Rs.25000 can be claimed – self, parents, spouse, children allowed

(iii)The additional deduction – Medical bills

Most companies allow medical reimbursement – give chemist bills upto Rs. 15,000

iv)The additional deduction – nursing a handicapped dependant or someone with a critical illness

Get a form 10I signed by the doctor and claim a Rs. 40,000- Rs. 125,000 deduction

(v)The additional deduction – Charity or donation receipts – there is no limit to charity

50% of the amount is tax deductible

Daaru bill for heartbroken friend not allowed

(vi) NPS – New Pension scheme – additional 50,000 can be claimed as deduction, over and above 80C-     Any bank will do it

VERY VERY IMPORTANT – HOUSE RENT ALLOWANCE

Thumb rule –  Submit rent receipts if rent is below Rs. 10000 per month. Submit the rent agreement for anything above that.

WHAT IS ALLOWED formula --->

50% of Basic Salary +Dearness Allowance OR 40% (if you’re not in a metro) OR

Actual rent minus 10% of Basic Salary OR

Actual HRA

Whatever is the least of the above, is what you shall claim!

Hope the above helps. Feel free to write to me for any queries.