The 555PM SHOW: 5 Hacks to Save More Taxes [Income Tax]

1. IT Department has allowed filing of the returns till Nov 30th owing to COVID situation in India.

2. IT Filing is actually easier to understand than the features of a Car.

3. Tax Slabs:

4. Amount of Tax Payable: (Examples)

Income Bracket: Rs.7.5L

Total Amount of Tax Payable (According to the slab): Rs.65000 which is 9% of the Total Income

Income Bracket: Rs.13.5L:

Total Amount of Tax Payable (According to the slab): Rs.226000 which is 17% of the income

5. There is a scarcity of information on this topic of how could we save Taxes.

6. From the above 2 examples, with the applicable deductibles:

i) We were able to save Rs.48000 from Rs.65000 for the Income bracket of Rs.7.5L

ii) We were able to save Rs.82000 from Rs.226000 for the Income bracket of Rs.13.5L

7. Tax-free Deductions:

i) 80C: Save more amount by investing in EEE Schemes which are Cash efficient when the

Investment is running. Examples of the EEE Schemes are: PPF, EPF, ULIPS, etc. You can invest Rs.1.5L in these schemes and claim complete exemption from the Income.

Note: EEE Schemes refer to those schemes which are exempt, exempt, exempt. This means that an investment is allowed for a deduction, tax need not be paid on the returns paid on the accumulation phase and income from the investment shall be tax free in the assessee’s hands at the time of withdrawal.

ii) NPS: National Pension Scheme- Over and above Rs.1.5L invested in EEE Schemes, you can Invest Rs.50000 in this and be eligible to claim complete exemption from the income.

iii) If someone who is in the tax bracket of Rs.13L, you can save Rs.15000 from the very moment

iv) 80D– Health Insurance- Rebate of Rs.75000 on the income

v) 80EE: Exemption for Home Loan Interest

vi) 80G: Exemptions on Donations (50% or 100%)

vii) 80 EEB: Car: Interest on Electric Car loan- Exemption of Rs.1.5L

8. Only the basic of 80C, and other basic sections are taken into account for the above example to arrive at the amount of the Taxes that can be saved. If all the sections are applied, the savings on the Taxes will be even more.

9. Benefits of Income Tax Filing:

i) Loans: Beneficial for getting a loan

ii) Better Credit Score

iii) Carry Forward losses: Set off of the losses to the next year is available

iv) Visa Processing

v) Buying a Higher Life Insurance Cover

vi) Startup Funding

vii) Part-Time Consulting Job

viii) Claim Tax Refund: Claiming TDS

ix) Self-Employed: Investments

10. Importance of Goal-Planning:

i) Few rupees planned results in few hundred rupees saved

ii) Goal-planning is important for Fulfilling the Dreams of the Family and ourselves

iii) How prudently goal-based are you in your Life?

– Should you know if you are a gadget lover

– Should you know you are a Traveller, you would plan up your finances accordingly to fulfill your Dreams.

iv) Should you have Goal-based planning? – Have a complete list of Goals and Dreams. Add as many Goals and Dreams as you can.

v) These shows will be Educative and Influential if you have Goals and Dreams. Else, it would just be informative.

These are the quick show notes. They definitely can’t compare to the depth and exchange of having been on the show but this effort is just to ensure there’s a revisit place for all those who were on the show and some highlights for those who missed.

Please do join the next 5:55PM show the upcoming Saturday. Request an early invite via https://happywise.in/whatsapp

Author: Nirmal Jain | Nirmal Jain is the Co-Founder at HappyWise Financial Services. He has helped over 100 Families over the last 15 years of his services in the Financial Planning Sector. He has been a mentor to several people to help them better understand investments, stocks, mutual funds, financial planning, personal finance and above all his favorite term “The Power Of Compounding!”.