Tax and investment expert Balwant Jain believes that while choosing tax-saving options, people should also keep their financial goals in mind. Jain says that planning for income tax from the very beginning is not a difficult task and it also has many benefits.It’s been nearly a month since the beginning of the new financial year (FY), and this, according to the business experts, is the best time to finalise your investments and taxes. Experts feel that taxpayers should start their tax planning from April, as it will enable them to make the right decision about investments.
Speaking to Dainik Jagran, tax and investment expert Balwant Jain said people buy life insurance policies in a hurry to save income tax at the end of the financial year, a move he said should be avoided.
He further said that people, while selecting the appropriate tax-saving option, should look at their financial goals.
When asked about how tax planning should be done, Jain said people can calculate which expenses are to be incurred in a year under Section 80C of the Income Tax Act.
“For example, how much you will spend on your kids’ school fees, life insurance premium, PPF, etc. Under Section 80C of the Income Tax Act, the limit is Rs 1.5 lakh, deducting the amount which will be spent on these things. Now you will know how much money you have to invest under Section 80C,” Jain explained.
Talking about where people can invest to save income tax, Jain said youths looking for a long-term investment can put money in the Equity Linked Savings Scheme (ELSS) of Mutual Funds, where investors have been getting 16 per cent returns in the last 10 years.
Jain said people should invest in ELSS through the Systematic Investment Plan (SIP) from April as it would “average out the mutual fund unit cost and reduce the impact of market volatility”.
He further told Dainik Jagran that investing in Public Provident Fund (PPF) is also a good option for those who don’t want to take a risk. The interest earned on PPF is tax-free.
People with daughters can also invest in Sukanya Samriddhi Yojana (SSY) where they can earn a 7.6 per cent interest, Jain said.
When asked about investment schemes for senior citizens (people above the age of 60 years), Jain told Dainik Jagran that Senior Citizen Savings Scheme (SCSS) is a good option for them to save on taxes. At present, people can invest around Rs 15 lakh and get an interest of 7.4 per cent in SCSS.
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