Key issues to recollect throughout revenue tax planning for FY 2021-22

Income tax planning for FY 2021-22: First quarter of FY 2021-22 is gone and if you have not finished your revenue tax planning,, then it is not too late as there’s nonetheless eight and half month left to do this. According to tax and funding specialists, revenue tax planning for salaried staff is a vital monetary occasion and one should take it significantly as a penny saved is penny earned. Experts went on so as to add that whereas doing revenue tax planning, one must first exhaust its ₹1.5 lakh annual restrict below Section 80C after which an extra ₹50,000 allowed below Section 80 CCD (1B) on one’s funding in National Pension System or NPS scheme. However, this isn’t sufficient as there are numerous different elements like mediclaim advantages, tax effectivity of 1’s funding, and so on. that additionally wants particular consideration by the taxpayer.

Speaking on revenue tax planning for salaried staff Balwant Jain, a Mumbai-based tax and funding skilled mentioned, “The taxpayer should first try to exhaust its Section 80C limit of ₹1.5 lakh per annum. After this, he or she should move towards Section 80 CCD (1B) where an additional ₹50,000 annual benefit is given under NPS scheme investments.” Jain mentioned that Section 80C consists of choices like PF deductions, life insurance coverage premium, faculty charge for kids, and so on.

On what subsequent on revenue tax planning after exhausting Section 80C and Section 80CCD(1B) limits Kartik Jhaveri, Director — Wealth Management at Transcend Consultants mentioned, “Once, Section 80C and Section 80 CCD(1B) limit is exhausted, the income taxpayer needs to look at Section 80D and Section 80G of the income tax act. In Section 80D of the income tax act, an earning individual is given income tax exemption on mediclaim of ₹25,000 for himself and an additional ₹25,000 for its dependent parents. In case, the dependent parents are senior citizen, the mediclaim up to ₹50,000 for parents paid by the earning individual is income tax exempted. If an earning individual has done charity or donation, then 50 per cent of the donation is income tax exempted under Section 80G provided the receiver has Section 80G certificate issued by the Government of India.”

Advising taxpayers to have a look at the tax effectivity of 1’s funding throughout revenue tax planning; SEBI registered tax and funding skilled Jitendra Solanki mentioned, “One needs to look at the tax efficiency of one’s investment like FD (fixed deposit). If it’s yielding more than ₹10,000 in one financial year, then one can move some FD amount to debt mutual funds (MFs) with 2-3 years time horizon where short-term debt MFs may yield to the tune of 6.0 to 6.5 per cent per annum and the income will get added to one’s net annual income as LTCG on debt mutual funds becomes applicable only when the investment period is 3 years or more.”

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