Tax savings will help you ensure financial freedom

Financial freedom helps an individual from constant monetary worries and concerns in everyday life. This freedom has to be achieved through lot of work and effort.  There are several ways to ensure financial freedom such as investments in bonds, policies, gold or silver etc. but one of the best ways to save your hard earned money is tax savings plan. However, tax planning requires lot of attention as this can prove to be a road block in the effort. Too much or too little attention for tax aspect eats up the efforts to ensure financial freedom that you wish to achieve. A little bit of efforts, hardwork and strategy gives you fruitful dividends on tax savings.

The article offers a glimpse on some of the ways to achieve tax savings:

In taxation there are several tax deductions that are available for individual when they invest in specific investment tools. One of the popular ways to avail the benefit of deduction is under Section 80C that includes specified instruments life EPF, PPF, NSC, SCSS, ELSS, life insurance premium which are eligible for deduction of upto Rs 1.5 lakh a year. This gives a golden opportunity for an individual to create a tax savings plan to achieve financial goals. But if not taken a financial expert view this angle of combining goals and tax savings investment is missed out. This is something that needs to be looked at so that one’s investment can yield better results.

Retirement plan is one big goal every individual eye’s upon as it requires sufficient corpus to live during the dusking days of life. A little bit of attention to the tax aspect can help you save thousands under section 80C which can utilize to meet your financial goals.

For family health protection people often buy medical insurance policies which can be used for tax rebate during financial year end. Tax savings plan for health policies provide double benefits as the premium paid on medical insurance policies upto Rs 25,000 for individuals upto 60 years and Rs 30,000 for those above 60 years is available as a deduction under Section 80D. At the same time even preventive check up costs upto Rs 5,000 are covered.

Child education is another big concern that runs into the minds of people who are often worried because of the high costs involved. But a small tax savings step can ease the situation for the individual. To promote education government allows income tax deduction under section 80C (for payments made by self) and 80E for loan taken for education. The interest paid on the loan will be allowed as deduction for 8 years.

Equity is classic investment channel that helps in the process of wealth creation as well as build your tax savings plan. Equity oriented investments like shares and mutual funds give dividends that are tax free. The long term capital gain is also charged at zero per cent rate which makes the gains tax free as well. Tax savings plan ensure that your goal of wealth creation will be achieved smoothly by bridging up the loopholes for attaining these goals with the help of tax rebate and offer a financial freedom to fulfill your dreams in life. 

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Created on Dec 31st 1969 18:00. Viewed 0 times.

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