7 Tips for Efficient Tax Planning

You Should NOT Ignore!

Take Stock of your Finances

Calculate your annual income for the upcoming year in advance. Additionally, calculate your tax outgo based on your current investment measures. This would help you identify the areas where you can invest more to save on taxes.

New Tax Regime or Old Tax Regime?

In the new tax regime, the tax slabs are lower compared to the old one. However, you don’t have too many tax benefits on investments in the new tax regime. Use an income tax calculator to check which regime would suit you best.

Did you Exhaust your 80C Deductions?

You can claim tax benefits up to Rs.1.5 lakh on investments that fall under Section 80C. In case you are yet to reach the Rs.1.5 lakh mark, check other avenues for investing - ELSS, Life Insurance, PPF, etc.

You could Start Investing in Savings Schemes

You can plan for your retirement savings while saving on your tax outgo by investing in savings schemes like NPS, Senior Citizens Savings Schemes, National Savings Certificates, etc.

Have an Ongoing Home Loan? Save Tax on Your Investments

If yes, you can claim tax benefits under section 80C on the loan principal amount and Section 24 (b) on the interest amount. Additionally, you can claim deductions are Section 80EE & 80EEA, however, there are certain provisions for this.

Include Tax-saving FDs in your Plan

You can save on your taxes by investing in tax-saving FDs. However, note that tax-saving fixed deposits come with a lock-in period of 5 years. Keep the timeline in mind before investing.

Buy a Personal Health Insurance Policy

You should have a personal health insurance policy irrespective of your tax obligations. An insurance policy gives you a financial cushion during a medical emergency. Additionally, you can save tax up to Rs.25,000 under Section 80D if you’re below 60.

Planning to Move to a New Home Or Buy a Comprehensive Health Insurance Policy?

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