Initially, this article will discuss relevant provisions targeting specific sections of the IT Act, 1961 (Act), whereby IT savings are discussed. Then the writer will try to line up all major domains of IT saving schemes protecting different interests of taxpayers. Lastly, the writer will end the present article with some takeaway tips which can be used while choosing from available options of tax saving schemes.
IT Saving Schemes: Investment Deductible from Taxable Income
The tax benefit available in the statute is vast as it has nineteen sub-sections from 80C to 80U of the Act. However, when it comes to tax saving schemes, only 3 clauses are connected with the statutory provision, namely;
The amount invested by them shall be deducted from taxable income; hence said used income becomes free from IT liability.
Different IT Saving Schemes
There are various public and private institutions coming with endless saving plans that can be used for claiming IT exemption in terms of the clauses/sections enumerated in the Act. This decision can vary from case to case. To make it simple broad categorization of taxpayers is done as follows:
To Save: Confused taxpayers who have enough income but are not interested in tax-saving schemes' technicalities.
Free Bird: Single young person who wants to explore different notions with not much responsibility can go insurance plus investment infusion:
Growing Family: Taxpayer’s having dependants like spouse/children/parents can take care of their family with:
Worried Older: Senior citizen taxpayers may worry about their old age expenses.
Ending this article, the writer just wants to clarify that taxpayers should be clear in their mind that these saving schemes are not magic-wand. Using such schemes surely diminishes tax liability, but it takes taxpayers' money as an investment. Therefore, before choosing from the buffet of IT saving schemes, output from that investment has to be evaluated.