Importance of Tax Saving Advice
Paying taxes has seemed a near-death experience to many common folks and philosophers alike. So planning your finance is the ultimate solution for paying taxes with ease.
Here are a few tax saving advice which you should know to save taxes:
- Did you know that medical insurance and claims are liable for deductions for 25,000 INR. In the cases of a senior citizen, this amount doubles to 50,000 INR.
- Under section 80EE, you can claim home loan interest deductions upto 50,000 INR.
- Additionally, home loans also promise another deduction in the form of taxable income. The principal amount in your loan can reduce your taxable income by 1.5 lakh INR.
Moreover, individuals can make various investments under Sec 80C to keep your hard-earned money in your pocket. These include 5-year bank fixed deposit, National Savings Certificate, Public Provident Fund, and ELSS funds. As the Indian economy marches towards liberalization and more economic freedom for the doers, tax advisors have become more focussed towards tax savings.
How Financial Planning can help for Tax Saving?
Financial planning is a strategy of setting concrete financial goals and achieving these with proven processes during a specified time frame. In order to accomplish financial planning while saving tax, you need to consider several factors. These factors include the following.
- Assessing economic conditions to form reasonable expectations
- Laying out the scope of financial vision to explore all possibilities
- Evaluate your current resources and how much tax benefit you can avail within a set time frame
- Determine the potential costs and risks and plan a strategy that suits you the best
Why tax saving advice is Essential?
If you are looking for the best among all the tax-saving strategies, you are in for a surprise. Check out the chart below to know the various options and their potential returns.
| Name |
Returns |
Fixed Duration |
| ELSS Funds |
15% to 18% |
3 years |
| National Pension System (NPS) |
12% to 14% |
Till Retirement |
| National Savings Certificate |
7% to 8% |
5 years |
| 5-Year Bank Fixed Deposit |
6% to 7% |
5 years |
| Public Provident Fund (PPF) |
7% to 8% |
15 years |
So, all tax saving plans like Public Provident Fund, and ELSS, National Savings Certificate come with their pros and cons. You need a balanced head on your shoulder to choose the investment and planning cycle that best suits you. And this is not going to be easy.
But here is the general advice we offer to our clients:
- Make a list of your existing deductibles. These can include children’s tuition fees, home loan repayment, insurance premiums, and EPF contributions.
- If your total deductibles do not cross 1.5 lakh INR, find an investment plan immediately.
- Take stock of your goals, financial environment, risk assessment, and planning cycle to find a great financial planning scheme.
For example, if one is starting out in their career and falls in the 3-5 lakh income category, they will be faced with two options usually. The first one is to invest money to secure long-term finances or take advantage of the economic freedom at a young age. So, this individual can either go with health insurance deductions or invest in ELSS funds, also known as Equity Linked Savings Scheme.
As a general principle, the safest way to choose a healthier, wealthier, and wiser life is to rise early to tax-saving & financial planning. This is the surest way for anyone to beat the system. And we have been doing it for over 30 years!
SRE as Your Tax Saving Advice
At SRE, we have a wide range of tax advisors who can help you understand the different tax-saving strategies and also offer you the best tax saving advice to build a stable and robust financial future.
We have worked with millions during our thirty-year experience to help them see the light at the end of the tunnel.
So, whether you are looking for a more risk-taking approach or a safe approach to building your future, SRE will always walk side-by-side with you to assess financial risks, set long term goals, prepare a list of options to meet your goals, and help you earn the ultimate prize - peace of mind.