March is the last month of the financial year (FY) and it is the time to take stock of your tax situation to ensure that you have utilized all avenues of tax savings. Section 80C of the Income Tax Act,1961 (Act) provides for a deduction of Rs 1,00,000 in relation to certain investments (tax saving instruments) /payments made during the tax year. The various investments which are eligible for deductions under Section 80C are summarised herebelow: * Equity-linked savings schemes (ELSS) offered by the mutual funds; * Unit linked insurance plans for self and/or spouse,children. * Life insurance policies for self,and/or spouse,children ; * Employees contribution to recognised provident fund (PF); * Approved superannuation fund; * Contribution to public provident fund (PPF); * Deposits in post office schemes such as - National Savings Certificate (NSC),Senior Citizen Savings Scheme (SCSS),if it applies,and the Post Office five-year time deposits; * Term deposit with a scheduled bank for a period of at least five years; * Investments made in bonds issued by the National Bank for Agriculture and Rural Development (NABARD) and debentures issued by specified companies,In addition to the above investments,following payments also qualify for deduction under Section 80C * Payment of tuition fees for a full time education (available for any two children). * Repayment of the principal portion of a housing loan There are certain investments which get compulsorily made such as your contribution to PF,repayment of housing loan,payment of insurance premium for your existing life Insurance policies or payment of tuition fees etc. The right approach would be to total up the investments which you already have made and if these do sum up to Rs 1,00,000,then for the balance,decide out of the above eligible investments keeping in view your specific circumstances viz. risk appetite,investment objectives,when would you need funds in future etc. Do not miss to investment in specified infrastructure bonds as you will get deduction upto Rs 20,000 in relation to such investment made under section 80 CCF,which is in addition to the deduction of Rs,1,00,000 available under Section 80C. Interest on loan taken to acquire/construct the house in which you are staying is eligible for deduction upto Rs 1,50,000. The deduction gets restricted to Rs 30,000 where the acquisition/construction of house was not completed within 3 years from the end of the FY in which loan was taken Besides these,an individual gets a deduction of upto Rs 15,000 (Rs 20,000 where the individual is senior citizen) for the health insurance of self and his family. There is an additional deduction of Rs 15,000 where the health insurance is taken for the parents (Rs 20,000) where any of the parent is a senior citizen. If you did some charity,do check whether this is eligible for deduction under section 80G. It may save some taxes ! Timely submit the proof of above investments to your employer so that accurate taxes are withheld by the employer to avoid any excess deduction and thus saving you from hardship of claiming the refunds from the tax authorities. For those who have income from other sources such as bank interest,capital gains etc on which taxes due are more than Rs 10,000,there is obligation to pay taxes in advance in three installments namely upto 30% of taxes by September 15,60% by December 15 and 100% by March 15 of the FY. Sparing few moments now can save money for you and also provide peace of mind at the time of return filing ! Author is executive director - Tax & Regulatory Services,PwC India
