Invest, Earn & Save

As a youngster enters the highly enchanting but competitive job market, one realizes that life is much more than a simple 'Truth or Dare' game played in the college campus, while munching on a Double Cheeze Pizza. The college days are gone and we have made enough hay while the sun was shining. Now is the time to deal with the grey clouds and battle hard to survive, and if survived then look at a distant dream of being victorious in the field that one is in. One such grey cloud that one keeps struggling to make ends meet with is the process of filing one's return. Putting efforts to earn enough is a challenge but doing the same to save what one has earned through one's sweat and blood is a challenge all the more and many people bob down to it, losing their precious money in the process.

However, saving tax, ignoring its mystical facade, is a feat conquerable enough and knowledge of tax saving investment avenues along with the intent to make efforts towards the cause is a potent enough weapon in the hands of a lone ranger out on a battle to save one's hard earned money. What follows in this article is a list of tax exempted investments officially declared by the government, which could help crack the code of Tax Savings.......................

1. Exemption under Section 80C: Being one of the more preferred options of tax saving, Section 80C provides exemption from income tax on varied investments. These investments include National Savings Certificate (NSC), Public Provident Fund (upto Rs. 70,000/annum), 5 years bank fixed deposit, Unit Link Insurance Plans (ULIP), School fees of children, repayment of the principal amount of home loan and Employee Provident Fund among others. Except for PPF, one could invest a total of Rs. 100,000 in all other investment options and avail an exemption of income tax for the same amount under Section 80C.

2. Exemption under Section 80D: This exemption works well, especially for the people who have got themselves insured against any medical problems occurring to them or their family in the future. Section 80D provides an exemption to tax on the premium paid by an individual for Medical Insurance of oneself, one's spouse and children. One can claim deductions up to Rs. 15,000 and this amount could be further boosted by Rs. 15,000 for the medical insurance premiums of one's parents. In case of senior citizens, the exempted amount is Rs. 20,000 with the condition that the payment is made through cheque.

3. Exemption under Section 80DD: If one has incurred expenses on the treatment of a dependent, who is disabled in some way, then such amount of expenditure could be claimed for deduction under Section 80DD. The exemption amount varies between Rs. 50,000 and Rs. 75,000 depending upon the severity of the disability for the which the treatment process was initiated.

All these investment acts as two sided advantage gainers for the investor. On the one side, one saves on the taxes and on the other, one gains the returns that such investments generate, which in some cases are pretty handsome.