Friday, 23 March 2018

Tax planning Income Tax Returns !!




If your employer’s deadline has passed, you can still claim deductions while filing income-tax returns.
With March 31 approaching fast, most employees should ideally have given all their tax planning proof to their respective companies. If you have still not done so, it’s time to rush.

WHEN EXEMPTIONS CAN BE DENIED

If an under-construction property is not completed within 3 years, you stand to lose 85 per cent of the tax benefit under Section 24.
If premium is paid in cash for health insurance under Section 80D.
If donations made in cash exceed Rs 10,000 under Section 80G.
If freelancers or businesses make cash expenses of over Rs 20,000.

There are some key documents you need to submit as soon as possible. If your employer is still accepting documents, you will be able to claim reimbursements such as leave travel allowance, medical and telephone. A person can claim house rent allowance while filing returns but not the rest. If a person has missed the deadline for submitting tax-related documents, all deductions from Section 80C to 80U can be claimed directly while filing the tax return. Those who could not meet the employer’s deadline can make the required investments now and claim deductions at the time of filing returns.

Use technology: Thanks to technology, you can do almost all transactions on the internet. But, for certain transactions, like mutual funds, you need to complete the “Know Your Customer” (KYC) formalities. Many online mutual fund platforms such as FundsIndia or Aditya Birla Money’s MyUniverse can help you do this online, too. An Aadhaar card can also fast-track the KYC procedure for some instruments. These facilities should help you get done with your entire tax planning.

Do the numbers: First, check the deductions you can claim under Section 80C, which has a limit of Rs 1.5 lakh. There are about 15 types of investments and expenses a person can claim deductions for in this section. Before shortlisting the right products, check the amount already exhausted by the Employees’ Provident Fund (EPF). Subtract the EPF amount from Rs 1.5 lakh to know the available limit.

Investment options: Options that don’t require recurring payments include a five-year tax-saving fixed deposit, National Savings Certificates and an equity-linked saving schemes (ELSS). Of these, most investment advisors suggest a person should look at ELSS if they have risk appetite for stocks. The preferable route to invest here is via a systematic investment plan (SIP) but as you are already late, you can invest a lumpsum, according to a certified financial planner. Given the market conditions, even a lumpsum amount won’t hurt. "Most SIPs made in the last year have negative returns. A lumpsum will not hurt investors at present .If you already have a PPF account or ongoing term plan, you must make use of it.

Insurance benefits: Many people buy a term plan and also take an add-on critical illness cover. While life insurance gets a deduction under Section 80C, critical illness is covered under Section 80D. Many people don’t remember to separately claim these two.

Benefits through senior citizens and dependents: If your parents are senior citizens and you pay for their health insurance, you can get a deduction up to Rs 30,000. In the case of parents over 80 years, who might not be eligible for insurance, medical expenses up to Rs 30,000 can be claimed for both. Additional deductions are provided for parents over 80 years for medical treatment such as cancer or neurological illness.

For More Details Visit: LifeLine Insurance & Financial Expert

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