Tax can be taxing if you don’t take the measures to save it. As and when you go high up on the ladder of success and earnings, your taxable income gets higher too. Do not get bogged down yet as there are a lot of measures to have a healthy tax saving mechanism that can make your investments stronger and future secured. The Indian government has chalked out certain sections under which you can make certain investments and save your tax being deducted.
There is a lot of good content from good websites that can guide you in making these investments. You must always get help from your CA if you are getting into the bracket of low or high tax deductions. Your CA will be the best person to guide you and help you save your money. The most important piece of advice that comes from personal experience is to save money to invest in tax-saving vehicles. If you must invest, you should have the liquid to do so. You should start with a fixed deposit account which is also considered to be one of the tax-saving ways. Once the locking period is crossed, you can use that money to diversify into different investments.
There are a lot of sections where you can put your money to use. You can save up to 1.5 lakhs in 80C while you can also get your parent’s medical insurance up to 25000 each. You can also get yourself insured and medical insurance sections come under 80D. Apart from that, if you stay in a rented house, you can include that in HRA and get tax savings. If that’s not all, if you have a home loan, you can get a rebate on the interest that you pay on your EMI as a part of 80EE as well and your home loan can come under 80C. There are many other ways to save taxes.
You can save on your child’s tuition. Section 80C helps you invest, get good returns as well as save tax. Other sections may not help you invest but can help you get medically independent and help you when you need financial support the most. Saving money is not all but getting insurance is the second most important part. If you spend every dime on getting medical help, you may not be able to invest and save for the future. As you earn well, your responsibility towards your money and future also becomes dependent on you. You must try to ensure every bit so that you can save money at the right time as well as make the most of your future and present carefree.
Plan well so that you can have enough funds to pay toward your investments. Not just investments but also toward your insurance. Read all the documents carefully to avoid any goof-ups. There is no shame in asking questions as you are the one to put in your hard-earned money. You must also benefit from your investments. If you have a plan, that is, shortly, to get a home or move somewhere, plan that according to your investments.
Do ask about the lock-in period for your investments as few tax-related ULIPs -and mutual funds have a 3 to 5 lock-in period. Once you have these queries answered satisfactorily, you can research the market rate and the condition of the market. You must also discuss with your CA and investigate your saving capabilities. If you are dependent on the market completely, you must be ready to incur certain losses as the market can be highly volatile. But it is advisable to invest in certain market-related investments and other portions into safe investments so that you do not lose badly.