Personal Tax Optimization

Pesronal Tax Management – Why and How….

Income Tax forms an integral part of Revenue generation for all the Economies around the Globe. However, there is a silver lining too, to this Neccessary Evil…. Yes….. This becomes a tool in the hands of the Governments to bring about behavioural changes in the society by rewarding the Saving and Investment behaviour exhibited by the individuals.

With the aim to encourage Savings and Investments amongst Tax Payers, The Income Tax Act provides various Deductions from the Taxable Income under Chapter VI. Though the list by no means is exhaustive, here is the brief summary of the same –

• Sec 80C – Various Investments like Life Ins Prem etc
• Sec 80CCC – Pension Fund Contributions
• Sec 80CCD – NPS Contibution
• Sec 80CCD(1b) – Additional 50K NPS Contribution
• Sec 80D – Medical Insurance Premiums
• Sec 80DD – Handicapped Dependant
• Sec 80U – Handicapped Assessee
• Sec 80TTA – Interest on Savings Bank Account 
• Sec 80TTB – Interest on Savings Bank Account (Senior Citizens)
• Sec 80E – Higher Education
• Sec 80G – Specified Donations

Intelligent use of various such Deductions and Exemptions available in IT Act, one can ensure their individual Goals Based Investments as well as Tax Optimization so as to save more.