Tax Saving

There is more to tax planning than exemptions available on savings. With our advice, you will pay the right amount of tax, not more and not less. You will also know how to tax proof your incomes and gains. After all, your capital is more productive in your hands and it can work wonders for you if planned properly.
Keynotes:
Tax planning is not a device to reduce tax burden. In fact, it helps savings by investments in government securities. Savings and investments are interconnected. Before making investments, the person must consider various factors such as:

This varies from person to person. A person by investing in NSC saves on his tax. However, the interest on the investment is taxable. Again, if the investment is made in PPF, he is not liable to pay the income tax on interest. But the period of NSC is six years whereas in the case of PPF the period of repayment is 5 years. However, a portion can be claimed after 7years. Thus, the person who makes the investment has to consider whether he requires the amount after 5 years or he can wait for a longer period.

To make investments there should be savings. A lower income person also wants to save, but his gross income and day-to-day expenses don’t leave him anything to save. To increase savings, one should make investments that give reasonable returns. Again, this return becomes a saving if invested.