11th Hour Tax Planning : Infra Bonds

Tax planning is a yearly exercise which has got the dual advantage of saving tax + getting good returns. With the financial year ending in March, many salaried investors would have completed their tax planning exercise by now. But there may be few salaried investors and whole lot of businessmen and individuals who would be waiting till the last minute to complete their tax planning. With just Feb and March left out, it is high time they gear up and complete their tax planning.

In a Nut shell:
(1) You can Invest a total of Rs.1,20,000 in various tax saving options under Section 80C
(2) You save tax according to your tax slab. Person in 10% tax slab would save 12000, 20% would save 24000 and 30% would save 36000.
(3) By investing this money, you save the above mentioned tax, which would otherwise have been paid. Apart from that you get back these investments after a duration, along with returns as lumpsum.
(4) Apart from this Rs.1,20,000 investments made in Mediclaim qualify for tax savings under Section 80D. But the premium paid is not refundable, unlike investments under Section 80C.

Investment avenues:
Out of Rs.1,20,000,
(a) Rs.20000 needs to be invested only in Infrastructure bonds offered by companies like IDFC, L&T, IFCI, IIFCI and L&T etc.
(b) Rs.100000 can be invested in one or a combination of the following
o LIC Schemes
o NSC Certificates offered by Post Office
o 5 Years investments offered by postoffice Term deposits and banks
o ULIP Schemes including Guranteed NAV ULIP’s
o Pension Plans
o Public Providend Fund account
o Tax Savings (ELSS) Funds which invest in stock market
o Other options declared open from time to time

If you have not made your tax saving investments, do call us immediately to make it. Why wait till last minute, when you have adequate time in hand. With stock markets coming down, you get more units in ELSS funds if you invest in this period. Hence make use of it.