Tax planning for individuals

Now the aim is to reduce your taxable income this year. You can reduce your tax burden wisely. The new General sales tax introduction and demonetizastion of Rs.500 and Rs.1000 currency notes in the year 2016 make you to think about your financial safety. 

For that already the time is nearing. Go fast and grasp the methods for reduce tax burden.


Please note tax planning means not reducing the tax alone, it means more cash flow after paying tax on time.


Align your Portfolio 


Financial portfolio
Various investment options for individuals

 New joiner of Income tax paying group


If you are getting into income tax slab in the current year, then you can invest in all available tax saving plans. It ranges from Insurance, Equity linked mutual fund, National Savings certificate etc.


If you dont know you are coming under taxable category, just click to know tax slab for the year.

Visit Clear tax website gives you the tax slab rate.


For 10 % or 20% tax payers


If you are already invested in tax savings plans, you can sell your equity oriented mutual funds to generate additional funds as it does not attract tax. Only the condition is the funds should be sold after at least one year of holding.


Useful info on this, how mutual fund are taxed. Use this to know how to increase your cash flow and you can invest this in tax saving funds. Preferably National Pension Scheme – NPS is better as you can invest in lumpsum. Public provident fund also better choice.


For 30% tax payers


Income tax savings for senior people

It is under the assumption that you have invested under Section 80c upto the limit and there is no further savings able to do for reduce your burden. Be happy that you are one of the 3.3% of the population who pays tax properly.


Useful link : budget-2016-fm-arun-jaitley-must-find-ways-to-double-income-tax-payers/194089/


Instead of increase your tax investments, you can withdraw of matured investments which are non taxable. For example, Equity-oriented funds have no tax on long-term capital gains. So withdraw the amount which is required for you out of your existing savings.


Get the Insurance maturity amount


If the investment are made in many insurance schemes or going to mature soon, then it is helpful to increase your outflow of money. Because maturity amount from insurance is not taxable under income tax.


Useful link : Nine incomes which are not taxable


Many pineapplesAccumulated income from insurance schemes are good source of tax planning


Donate to charity (Out of income on sale of mutual funds / insurance maturity)


If you plan to give a good amount to charity this year, then use the redemption of mutual funds amount or insurance maturity amount to make the donation. Kindly note under section 80G, the donation should be made to valid trust prescribed under the Income tax Act. Kindly confirm it before making the donations.


Option 1 : If you pay tax on income and no donation made

Option 2 : If you pay donation of Rs.50000/- out of income on sale of mutual fund

Option Income Income over 10  lakhs Tax slab Tax on above 10  Lakhs
1    1,050,000 50000 30% 15000
2    1,050,000 0 30% 0



Useful link : Know about gift tax exempted


Know about tax planning instruments


Different type of investment



        Public Provident Fund  – PPF

        National savings certificate – NSC

        National pension scheme – NPS

        Equity linked savings scheme mutual funds – ELSS

        Life Insurance


 These are some of the investment instruments for tax planning. If you like to invest in mutual fund i have a good option for you. For that just send message to me in the contact form.



 I will share you a link in which you can start invest in multiple mutual funds in one place.

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