Dilzer Consultants - Investments and Financial Planning

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Tax Planning

Tax Planning is a wide,  interesting  and complex subject.

If done well, tax planning can help plan  Individuals and Business’s Wealth, Estate, Business Succession, through effective strategies.

In India both individuals and corporate have differing tax rates, implications and exemptions.

Again for Salaried individuals the tax saving strategies are less compared to self employed individuals, yet they can utilise tax saving strategies.  With proper planning, discipline and structuring both salaried and individual tax payers can avail tax deductions and help increase their income benefits.

For protection of assets, income and providing for streamlined cash flows to differently abled children, their are separate options like creation of trust, Letter of Intent, preparation of cash flow planning and financial analysis and claiming income tax deduction benefits from the Government.

For Business owners, business succession is a high priority. Protection of their income, personal assets from creditors and passing on the family heirloom are important considerations.Succession Planning plays an important role for Key business owners and what needs to be done to ensure continuity of business, continuity of management and protecting human capital?

Similarly for HNIs passing on wealth to the next generation requires careful planning.

For NRIs, place of residence, source of income, play a   vital role in tax planning and Cross Border Strategies become an important tool to understand the tax status, residency and source of income for taxation. DTTAA have to be studied between both countries to reduce double taxation.

There are many strategies one can utilse for planning their taxes effectively-  tax planning strategies, Tax harvesting in equities, tax deferment, Investment planning strategies to reduce tax burden on high income tax payers.

Some eligible tax deductions under Sec 80 C are

  • Public Provident fund PPF / EPF/ VPF
  • Equity Linked Savings Scheme (ELSS) in mutual funds.
  • Post Office investments- 
  • Principal component of Home loan. 
  • Tuition fees for child
  • Life Insurance and ULIP plans.
  • Sukanya Samriddhi Account Scheme

Budget 2015 provided a new tax benefit under Sec 80 CCD(1b) where in an additional investment of Rs 50,000 can be made towards National Pension Scheme (NPS) to reduce tax further. This exemption is over and above the limit of Rs 1,50,000 available under Sec 80 C.

Employees can contribute to Government notified Pension Schemes (like National Pension Scheme – NPS). The contributions can be upto 10% of the salary (or) Gross Income.

(10% of salary is applicable for salaried individuals and Gross income is applicable for non-slaried. The definition of Salary is only ‘Dearness Allowance.’ If your employer also contributes to Pension Scheme, the whole contribution amount (10% of salary) can be claimed as tax deduction under Section 80CCD (2). The ceiling limit of 1.5 Lakh u/s 80CCD is not applicable on employer’s contribution.)

Section 80D

Deduction u/s 80D on health insurance premium will be Rs 25,000, increased from Rs 15000. For Senior Citizens it has been increased to Rs 30,000 from the existing Rs 20,000. For very senior citizen above the age of 80 years who are not eligible to take health insurance, deduction is allowed for Rs 30,000 toward medical expenditure.

Section 24 (B)

You can claim upto Rs 2 Lakh as tax deduction on the home loan interest payment.

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