It is the time of the year when you have to submit all your tax benefits related documents with your employer organization.
Here are 4 important points in that regard:
i) Tax benefits on preventive health check-up (section 80D): This tax benefit has been newly introduced from the current financial year. If you have paid preventive health check-up fees (for self, spouse, children or parents) then the same can be claimed as deduction under section 80D for an amount up to Rs. 5,000.
ii) Tax benefit on investment in Rajiv Gandhi Equity Savings Scheme (section 80CCG): This tax benefit is also newly introduced and is applicable from the current financial year to the taxpayers whose annual taxable income does not exceed Rs. 10 lakhs. Deduction is available to the first time investors in equities and is equal to 50% of amount invested in specified equity shares or equity oriented mutual fund. The total deduction under the section is restricted to Rs. 25,000.
iii) Other tax benefits: Please do ensure that you claim the tax benefit available to you on medical reimbursement, leave travel allowance (LTA), house rent allowance (HRA), interest on housing loan, etc. by submitting the required documents with the payroll department. It is also advisable that you retain a copy of all such documents submitted. These would come handy if the tax department in future asks you to substantiate your claim on the tax deductions.
iv) Investing for tax saving: Before you make investment for tax saving, find out how much taxes are you going to save by making the investment. For example, if you are in 10% tax bracket then your income tax is reduced by Rs. 10 for every Rs. 100 invested in the tax saving schemes. In such cases, you may have to rethink if you indeed want to lock-in your funds for just 10% tax benefit. I am sure many of you would rather pay 10% tax and have 90% at your disposal.