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Start your tax-saving for the new financial year NOW!

March 31, 2014 11:37 IST

Don't wait till March next year. The new financial year begins April 1, 2014. Some tax-saving tips based on your age group and tax bracket

Most of us feel tax planning is a boring exercise done every year (or every March) to save tax through various tax saving products. However, like financial planning, tax planning is not the same for everyone.

You need to invest in various products as per factors such as your tax slab, age, risk and so on.

Here is an effort to distinguish tax planning based on your age group and your corresponding tax slabs.

Tax planning for age group 25-35

Most of the youngsters between 25-35 years of age are either in 10 per cent or 20 per cent tax slab.

Section 80C helps save up to Rs 1 lakh.

EPF/NPS should cover up to Rs 25,000 of 80C.

Investment in ELSS should be up to Rs 40,000.

PPF investment can be up to Rs 25,000.

Life insurance premium can be used for deduction up to Rs 10,000.

Under section 80D (mediclaim), tax deduction is allowed up to Rs 15,000. At least Rs 10,000 of this limit should be utilised by opting for individual/floater policy.

There are chances that you are servicing an education loan. Entire interest payment is deductible for exemption from your taxable income.

You would be eligible for RGESS (Rajiv Gandhi Equity Savings Scheme) if you are a first time investor. Under this scheme you can invest up to Rs 50,000 in stocks and save tax up to Rs 2,500 (10 per cent bracket) and Rs 5,000 (20 per cent bracket).

You must have also applied for housing loan. Interest paid can be claimed up to Rs 1,50,000 if you are living in that house.

Disclaimer: The age groups and their corresponding tax brackets are assumed for the purpose of this article. There could be many, many examples where someone in the age group of 25-35 years could be in the highest tax bracket of 30 per cent and someone in the 50 plus age group could be in the 10 to 20 per cent tax bracket.

 

Start your tax-saving for the new financial year NOW!

March 31, 2014 11:37 IST

Tax planning for age group 25-35

Most of the youngsters between 25-35 years of age are either in 10 per cent or 20 per cent tax slab.

Start your tax-saving for the new financial year NOW!

March 31, 2014 11:37 IST

Tax planning for age group: 35-50

Most of the people in this age group will be in either 20 per cent or 30 per cent tax slab.

Conclusion

This is only one of the strategies for planning your taxes based on your age.

Saving tax should not be your only goal. Make sure that tax planning is a subset of financial planning and not isolated from it.

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March 31, 2014 11:37 IST

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