Make Investments

Save on Income Tax

Types of taxes

Direct Tax
● Income tax paid by Individual or HUF
● Corporate tax paid by businesses

Indirect Tax
● Service tax, VAT, GST
Income Tax Slabs Tax Rate for Individual & HUF Below the Age Of 60 Years

Up to ₹2,50,000* Nil

₹2,50,001 to ₹5,00,000 5% of total income exceeding ₹2,50,000

₹5,00,001 to ₹10,00,000 ₹12,500 + 20% of total income exceeding ₹5,00,000

Above ₹10,00,000 ₹1,12,500 + 30% of total income exceeding ₹10,00,000

But wait, there’s more...

Note : An additional 4% Health & education cess will be applicable on the tax amount calculated as
above.

Surcharge: 10% of income tax, where total income exceeds Rs.50 lakh up to Rs.1 crore.
Surcharge: 15% of income tax, where the total income exceeds Rs.1 crore.
Remember, if you earn an income, you just need to

Declare Investment Plan

Submit Investment Proofs
File Tax Returns
Verify Tax Returns
Deadlines

31 January 31 March 31 July Oct – Nov

Deadline to submit your Deadline to make investments Last date to file your Time to verify your
investment proofs under Section 80C tax return tax return
Head of Income Nature of Income covered

Income from Income from salary and pension are covered under here
Salary

Income from Other Income from savings bank account interest, fixed deposits, winning KBC
Sources

Income from This is rental income mostly

House Property

Income from Income from sale of a capital asset such as mutual funds, shares, house property
Capital Gains

Income from This is when you are self-employed, work as a freelancer or contractor, or you run a business. Life
Business and insurance agents, chartered accountants, doctors and lawyers who have their own practice, tuition teachers
Profession
How to reduce your taxable income
Let your hard-earned money be yours and only yours!
House Rent Allowance
The deduction available is the least of the following amounts:
● a. Actual HRA received;
● b. 50% of [basic salary + DA] for those living in metro cities (40% for
non-metros); or
● c. Actual rent paid less 10% of basic salary + DA

If the employer doesn’t provide HRA, you can claim it under Section 80GG,
you need to fill Form 10BA.
Live with your parents?

You can still claim rent.

You need to draw up a rental agreement.

If you transfer money to their account,

it’s even better.

But anything above Rs.8,333/- p.a.,

you have to produce landlord’s PAN card.
A boring calculation!

Sl No Particulars Amount (in Rs) Amount (in Rs.)

1 Actual HRA received 1,00,000

2 Rent paid (15000 p.m. * 12 months) 1,80,000 1,47,600

minus(-) 32,400

10% of {(25000 p.m.*12) + (2000p.m.*12)}

3 50% of {(25000p.m.*12) + (2000p.m.*12)} 1,62,000

Basic DA
(50% is considered as the accommodation is in Delhi)

4 Exempt HRA = lowest of 1,2,& 3 1,00,000

 Section 80C
Rs.1.5 lakh deduction in total
- Investment in PPF
– Employee’s share of PF contribution
– NSCs
– ULIPS
– ELSS
– Five year deposit scheme
– Life Insurance Premium payment

– Children’s Tuition Fee

– Principal Repayment of home loan
– Sum paid to purchase deferred annuity
- Investment in Sukanya Samridhi Account

– Senior Citizens savings scheme

– Subscription to notified securities/notified deposits scheme
– Contribution to notified Pension Fund set up by Mutual Fund or UTI.
– Subscription to Home Loan Account scheme of the National Housing Bank
– Subscription to deposit scheme of a public sector or company engaged in providing housing finance
– Contribution to notified annuity Plan of LIC
– Subscription to equity shares/ debentures of an approved eligible issue
– Subscription to notified bonds of NABARD
Section 80C

Investment Risk Interest Guaranteed Returns Lock-in Period

ELSS funds Equity-related risk 12-15% expected No 3 years

PPF Risk-free 8% Yes 15 years

NSC Risk-free 7.6% Yes 5 years

5-Year FDs Risk-free 7-9% expected Yes 5 years

Do you really need life insurance?
If you have dependents or plan to have dependents, then yes.

Life insurance schemes are plenty. There are a lot of fresh policies with crazy deals.

Buy online it’s cheaper. Save on tax.

Term plan - usually no maturity amount. But cheap premium, high payout. Start young and retain a low premium
till maximum age. Covers up to 90-100 years of age. Lump sums for critical illnesses.

Life plans - Payout upon maturity, death or withdrawal. T&C applies. Premium increases with age.

Retirement plans - build a corpus for your retirement.

Child plans - Save for child’s life events like birth, education, marriage, etc.
 Section 80D Medical Insurance

● Medical insurance
● Preventative health checkups
● Medical bills replaced with flat Rs.50,000 deduction

Side note: Buying insurance from a bank. The terms and conditions
of the policy are subject to annual review.
Person insured Maximum deduction Below 60 Maximum deduction 60 years or
years older

You, your spouse, your children Rs.25,000 Rs.50,000

Your parents Rs.25,000 Rs.50,000

Preventative health checkup Rs.5,000 Rs.5,000

Maximum deduction (includes preventive health Rs.50,000 Rs.1,00,000

checkup)
 Miscellaneous

80CCC For amount deposited in annuity plan of LIC or any other insurer for a pension
from a fund referred to in Section 10(23AAB)

80CCD(1) Employee’s contribution to NPS account (maximum up to Rs 1,50,000)

 Section 80TTA

Deduction on interest
From savings account with bank or post office
Not applicable on FDs and RDs
If you’re interest income is less than Rs.10,000, you can claim a deduction.
Section 80TTB
Senior Citizens
Higher slab of Rs.50,000 exemption
Investments without tax benefit
Build your corpus
Mutual Funds - Research and invest

Fixed Deposit - 2-3 years highest interest

Recurring Deposit - Good for building capital

Sovereign Gold Bonds - Invest in gold without actually buying physical gold and
storing it

Gold - Always appreciates in the long run

Unit Linked Insurance Plans - Mutual funds + life insurance

The Stock Market

1. Day trading
2. Long-term

Extremely high risk.

Both have risks and need sufficient research and knowledge

Hire a broker/agent

Always invest only spare cash in stocks. Never invest your savings.

Cryptocurrency

Don’t do it. It’s illegal now.

 Systematic Investment Plan (SIP)
Invest in mutual funds by making monthly installments. You can start with Rs.500 but a good amount to invest
is Rs.5,000 minimum.

1. Scripbox
2. ClearTax
3. Franklin Templeton
4. SBI
5. HDFC
6. Kotak
7. Birla
8. Quantum

Any ELSS (Equity Linked Savings Scheme) will give you tax benefits. Lock-in period of 3 years.
 Where and how to open
PPF - Post office / any public sector bank like SBI, Canara, ICICI. Deposit minimum Rs.500 up to Rs.1.5
lakh per year. Deposit at the start of the month to get maximum interest.
15-year term. You can make withdrawals after 4 years.

NSC - Post Office (Minimum Rs.100. No limit on investment, claim only Rs.1.5 lakh.
5 year and 10 year lock-in)

NPS - Post Office/Online (Minimum Rs.500 to open)

Minimum Rs.6,000 a year. Till the age of 60 years. Can invest till 70 years.
1. State Bank of India or SBI PPF Account
2. ICICI Bank
3.
4.
HDFC Bank
Central Bank of India
Open a PPF
5. Bank of India (BOI)
6. Union Bank of India
7. Bank of Maharashtra
8. IDBI
9. Bank of Baroda (BOB)
10. Vijaya Bank
11. Allahabad Bank
12. Oriental Bank of Commerce(OBC)
13. Canara Bank
14. Corporation Bank
15. Dena Bank
16. Indian Bank
17. Axis Bank
18. Indian Overseas Bank (IOB)
19. Punjab National Bank (PNB)
20. United Bank of India
21. Syndicate Bank
22. Andhra Bank
23. UCO Bank
Online PPF

● State Bank of India or SBI

● ICICI Bank
● HDFC Bank
● Canara Bank
● Axis Bank
● Central Bank of India
● IDBI
● Allahabad Bank
● Bank of India(BOI)
Remember to tell your family, nominee or heir that this exists!!

In 2017, it was reported that Rs.27,000 crore was lying in

inoperative accounts
(declared inoperative after 36 months of attaining age of 55)

March 2018, Rs.15,167 crore was lying unclaimed with life

insurers.
invest. I stayed up late last night doing this!