Tax saving should not be last minute thing. Tax saving should happen diligently throughout the year.
The most common investments people think of, when they think of Section80C are PPF and ELSS.
There are other options also,
Contribution to own Employee Provident Fund (EPF) all year.
If you have a home loan? If yes, the principal repayment this year counts under Section80C as well.
Investment in ULIP premium, or at least part of premium, is deductible under Section80C too.
Investment in any 5 year FDs in Financial Year will also be considered.
National Savings Certificate,
Senior Citizen Savings Scheme investments,
Investments into the National Pension Scheme,
Any life insurance premium you might be paying,
All of these investments are deductible under Section80C
Health Insurance Section 80D.
A mediclaim policy can save tax on the premium paid.
Education loan Section 80E.
If you have taken an education loan for yourself, your spouse, your kids, or even of a child of whom you are a legal guardian, then every year you can avail a full deduction of the interest you are paying on the loan.
Living on rent?
Show your rent receipts to claim deduction using your HRA (House Rent Allowance) benefit available to you in your salary structure. You can avail the least of the following:
Actual HRA received,
Rent paid in excess of 10% of your salary (Basic + DA) 50% of salary (Basic + DA) if you live in a metro, 40% of salary (Basic + DA) if you live in any other city.
Medical bills reimbursement
Everyone buys medicine on regular basis so up to Rs 15000 annually one can claim deduction. One has to submit original medical bills.
Holiday in the year
One can plan a holiday in block of 4 years twice LTA can be claimed. Original tickets need to be submitted.
DIVIDENDS ARE TAX FREE
Dividend is tax free in individual’s hands but it is not regular. If you have surplus funds, you should invest them in growth mutual funds and get tax-free income from dividends. For emergency funds requirement you can sell a part of your portfolio, money gets credited in your account within 2 days.
SWP (SYSTEMATIC WITHDRAWAL PLAN) GREAT VALUE FOR TAX FREE RETIREMENT
Mutual fund’s Systematic Withdrawal Plan (SWP) offers great value in terms of tax free monthly expenses after retirement. Systematic withdrawal plan is the opposite of system investment plan (SIP). You can receive commuted pension at retirement and put the money in SWP. It is convenient to manage SWP through ATMs/internet as compared to NSC or post office deposits. A fixed amount will be withdrawn every month from your SWP and deposited to your account. The balance amount remains invested in Mutual fund.
Parents can cut your tax
Invest in parent's name if they are in a lower tax bracket. Every adult enjoys a basic tax exemption limit. For senior citizens (above 65 years),the basic exemption limit is higher. If any or both of your parents do not have a high income but you have an investible surplus, you can avoid tax by transferring money to them which can then be invested in their name.