Financial year 2016-17 is about to come to an end. As we reach March 31, 2017, completing your tax saving investments must be on your priority list. If you are an income earner with a total income of more than INR 2,50,000, you must be aware that you are subject to income tax. But there is a way in which you can reduce your tax liability, ie through making tax saving investment.
How does this work?
As per the income tax law, if your total income is subject to tax (ie you earn more than INR 2,50,000), you are eligible to claim deductions against such income. So, the balance income (after deductions) is subject to income tax.
For example, if you earn a total income of INR 4,00,000 and you have made investments of INR 1,50,000, your taxable total income would be INR 4,00,000 less INR 1,50,000 ie INR 2,50,000. Therefore the tax payable by you would be Nil (as income upto INR 2,50,000 is tax free).
Tax savings investment planning
Most of us plan our tax saving investments at the beginning of the year (especially salaried persons, who declare their investments at the beginning of each year to their Employers). But seldom make investments as per the plan. However, it’s never too late to make these investments. You can still make your investments on or before March 31, 2017.
Worried about tax deducted by your employer? Don’t worry, you can claim a refund of the excess tax deducted while filing your income tax return. I you have a query, write to us @ email@example.com
In this post, we have discussed the pros, cons and features of the most popular tax saving investments in the market, in the table below:
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