The last minute tax saving guide 2017

For some reason, we love the last minute, the eleventh hour, the impending deadline.

This happens every year for your tax saving needs too. 2017 is no different.

Well, I would urge you to take the opportunity to learn as you do.

Here is a list of blog posts that you can use as your tax saving guide. You may also want to share it with anyone who may find it useful and earn some good karma.

#1 Save taxes smartly

This is a note written quite some time back. It points out that ultimate rush scene for saving tax last minute. It also mentions all the instruments one can use to save taxes smartly under various sections of the Income Tax Act such as 80C, 80D and others.

I hope you take the word ‘smart’ seriously and you do not have to read this again next year.

#2 Buy Life Insurance

Rule 1: Life insurance does not mean LIC.

Rule 2: Don’t forget rule no. 1.

The irony of the matter is that most people still buy life insurance as an investment. Every day I receive queries where investors have realised that they bought the wrong product and want to get rid of it. The biggest pushers are the banks. Do not take their advice. Stay away from money back, endowments, whole life, pension plans, etc.

Stick with term plans only. If you haven’t taken one, go ahead and buy now. How much life insurance should you have? This note can be of help.

Note: If you are planning to quit your job and be on your own for some time, buy your term plan now. It is not so easy afterwards.

#3 Buy Health Insurance

If you are working, you probably already have health cover / mediclaim from your company. Few questions you should ask though: Is that enough? Does that cover all members of your family including parents? What will you do when you are in between jobs or on your own?

With that perspective, here’s a comparison of 4 health insurance covers. It could be a good starting point to evaluate and pick your own.

Buying your own cover early in life also helps you exhaust your waiting periods (upto 4 years after buying the policy) and get the policy ready for use as and when required.

#4 Invest in PPF

Oh yes! This is the no. 1 favourite still and for good reason. Tax free interest, higher than most of its small savings counterparts and cannot be attached in any legal case. What more can one ask for.

Interest rates have been falling though and very soon it might not be that attractive. Know more of its features.

#5 Invest in NPS

The National Pension scheme garners a lot of investor attention specially because of its additional savings. Under Section 80CCD, upto Rs. 50,000 (over and above Rs. 1.5 lakhs under section 80C) of investment in NPS is tax deductible. Means, you do not have to pay tax on this investment in NPS.

Most people double count the tax benefits and think this is the best investment on the planet.

Then, with each budget of the government adds a feature to make it positive. Yet, is it worthwhile?

I have personally taken a stance to not invest. Here’s my reasoning.

Do read the comments too.

#6 Tax saving mutual funds

ELSS or tax saving mutual funds is a seriously under-employed tax saving investment tool. For those who wish to take exposure to equity as well as save taxes, this is a great option.

Here’s all about it. Again do read the comments.

 

Now, like always, I repeat one thing. Tax saving should not be the only reason to make investments. It should be a part of your financial and investment plan.

You first decide what do you want your money to do, zero down on an investment mix and then buy individual investments.

Don’t put the cart before the horse.

All the best!

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Want to read more about tax savings? – Click here.

Hope you find the tax saving guide useful. Do share your feedback in the comments.