Want to save income tax, then do investments before March 31, otherwise more tax will be deducted

The financial year 2021-2022 will be ending on 31st March 2022. If you have not invested anywhere to save income tax, then your tax can be deducted. It is important that you must see your Investment and see its completed or not before the end of March.

To save tax, one can choose Tax Saving Investments and invest before 31st March. If you are salaries person then you must be receiving emails from your organization’s accounts/finance department requesting that you produce investment documentation in order to avoid an excessive TDS deduction.

To claim the Income tax benefit of an eligible tax-saving investment in any given year, the date of the investment should be within that particular financial year, i.e., from April 1 to March 31.

Last minute tax-saving investments also often end up going into unsuitable avenues. This happens as people frequently lose focus in the hurry to invest before the financial year ends.

If you do not know where to invest, then here we can tell you the ways of investing related to Tax Saving.

Section 80C Investement Limit:

Very first thing you should do is to check your Section 80C Limit is fully utilized or not. The maximum you can invest is Rs. 1.5 Lakh annually under this section.

As per Section 80C you can do investment in, Provident Fund, PPF, Senior Citizens Savings Scheme (SCSS), Life Insurance Premium, NSC, Tuition Fee for Two Children, Sukanya Samriddhi Yojana (SSY) and Tax Saving Schemes of Mutual Funds. Home loan, principal Repayment will also come under the purview of this section.

Check Section 80C Limit and do investment Before 31st March 2022

Check till date how much you have invested as per Section 80C Limit. If your Investment as per Section 80C is Less than Rs. 1.5 Lakh then do your rest of the investment. You will get income tax deduction only on the amount of investment and Maximum Rs. 1.5 lakh under section 80C. This will reduce your overall tax liability.

What are your options if you have a PPF account?

If you have a PPF account, check to see if you have made any investments. Each year, a minimum contribution of Rs 500 is required to the PPF. If you have taken up Sukanya Samriddhi Yojana (SSY), you must additionally make a minimum contribution each year. This requires a minimum contribution of 250 rupees.

If you owe a life insurance premium, you can pay it. This way, your policy will remain active and you will retain the deduction benefit.

Contribution in Tax Saving Mutual Funds

If your Investment is Less than the limit of Rs. 1.5 Lakh then you can do your investment in tax-saving mutual Funds. Tax Saving Mutual funds is also very good option to save tax and the best thing is that Lock-in Period is only 3 Years which is very less compared to any traditional Tax Saving Scheme.

Additional Rs. 50000 Investment in NPS

Even After you have Investment Rs 1.5 Lakh under Section 80C you can further take the further claim deduction under section 80CCG1B by investing an additional Rs 50,000 in NPS.  To encourage investment in NPS, Section 80CCD(1B) of the Income-tax Act allows an additional deduction of Rs 50,000 over and above the Rs 1.5 lakh available under Section 80CCE.

Health Insurance Policies

Income Tax Benefit is available if you spend Rs 25,000 per year on a medical policy. You can purchase a medical insurance policy for yourself, your children, and your wife. You would tax exemption on the premium up to a maximum of Rs 25,000.

A deduction of Rs 50,000 per annum is allowed for the purchase of a medical policy for Parents (senior citizens).