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March 10, 2016
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April 11, 2016

Time to Rush the Tax Planning

If you haven’t submitted your tax planning proof, hurry, so that you can claim all deductions directly from Section 80C to 80U while filing tax returns.

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31 March is soon approaching, and you must’ve already submitted your tax planning proofs to your employer by now. In case you haven’t done so, it’s time to hurry. There are some important documents that you need to submit to your employer. If they are still accepting the documents, you can claim certain reimbursements like, medical, leave travel and telephone allowance.

If you have missed the deadline for submitting the investment proofs to your employer, you can still claim all the deductions under Section 80C and 80U, directly, while filing your tax returns. If you have failed to meet the employer’s deadline, you can still make the necessary investments and claim the deduction at the time of filing your tax returns. However, while making last minute investments, you should avoid instruments that require recurring commitments. You will be stuck with it for years, especially if you realise that the investment wasn’t suitable. This means that you should avoid last minute investment in a new insurance plan and a PPF account.

Investment options that do not require recurring commitment are National Savings Certificate, ELSS and a five-year tax saving fixed deposit. ELSS is the most popular option for investment, suggested by many advisors, especially, if you are planning to buy a house three to five years later.

You can get a deduction of up to 30,000 per month if you pay for your parent’s health insurance, who are senior citizens. Similarly, if your dependent is suffering from a disease, you can claim deductions under Section 80DDB.

You can get 50 to 100 percent on donations made, depending on the organisation that has received the funds. Mr Vaibhav Sankla, Director, H&R Block says that if your donations go beyond 10 percent of your total gross salary in a year, you do not qualify for tax deductions. He even adds that you can use interest for deduction under Section 80E if you have an ongoing education loan.

Source : Business Standard