One of the biggest investment errors we make during pressing times is to invest just to avail the tax deductions. Do not therefore make any investment just for the tax deduction. Tax planning is not about saving taxes but it is an important part of overall financial planning and should ideally be planned throughout the year company auditor in Delhi.
But unfortunately, we all consider it one time activity which we undertake generally in the last three months of the financial year without giving much thought on how it is going to impact our overall finances auditor in India.
” One of the biggest investment errors we make during pressing times is to invest just to avail the tax deductions. Do not therefore make any investment just for the tax deduction. There are only three months left for doing tax-saving investments for the year 2015/16. Most of you would have received emails from your human resource department to submit tax proofs. So, if you have not done your tax saving investments for the year yet, try not to commit the following mistakes in haste.
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Taxes are unavoidable but you can surely minimize its impact by filing the income tax return every year whether you have invested your money or made large payments against loan travel or insurance it’s time to look back at the year to maximise your deductions and thereby lower your tax burden in auditor in India.
There are many heads under payments and investments against which you can claim your deductions, but here are the top 5 that you shouldn’t miss out:
- Contribution made towards Public Provident Fund (PPF)
Investments in these small saving instruments start from as low as Rs 500 up to Rs 1.5 lakh with a rate of interest at 8 per cent per annum.
While the lock-in period is 15 years, withdrawal is possible under certain conditions.
The investment, the gains as well as the withdrawals are completely tax-free.
- Employer’s Provident Fund (EPF)
The employer’s contribution to your EPF is tax-free, and your contribution is tax-deductible under Section 80C of the Income Tax Act.
The total PF amount deducted annually can be claimed by you as deduction while computing your total taxable income.
So the money you invest in your EPF, the interest earned and the lump sum withdrawal after the specified period are exempt from income tax.
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