Investment Advice For Tax Savings & Other Benefits
Investment and tax savings are interrelated to each other. The more you are investing your money, the more you are saving tax. But, the important thing is that the money that you are investing should be in a right way and you should get the required benefits. So, if you achieve a good tax planning, you are saving a good amount of money from the income tax department. Here are a few tips that might help you out.
Making a separate income tax file for everyone
While you are investing money, it should be pretty clear to you that on whose name you are going to save the money. If you haven’t made separate tax files for everyone in your family, you should prepare them as soon as possible. The main motto behind this is you will get a proper tax planning and it will also help you out in saving a lot of amount. But, before starting with everyone else, first of all, you should start with your wife. If she is not having a separate income tax file, make it fast.
Saving money in your savings bank account
Recently, in the F.Y. 2014-15, the interest rates of the savings bank account have gone higher. So, it is actually a great idea to save a portion of your income in your savings account. One more advantage of saving in your bank account is that there will not be any tax imposed if the amount is up to Rs. 10,000.
Planning investments for your junior members in the family
If you are having a minor kid or grandchild in your family, consider different strategies so that you can secure his future and you can also save a portion of your money from the income tax. You should open a completely separate investment account for your child so that the child’s account is not clubbed with the parent’s account. You can also start a PPF account in the name of your child and hence you will be able to save a lot of money. Besides all of these, considering life insurance is also a great idea and it will also help you a lot in planning investment for your kids.
Zero coupon bonds
Have you ever thought of investing a few amount of your money in the zero coupon bonds? This is a kind of bond that is meant for those people who are not interested in incoming regularly. Normally, the maturity period of such kind of bonds is about 10 years. Moreover, if you are also thinking to pass on this bond to your minor child, it is actually a great idea.
This bond is meant for those who are earning more than 10 lakh a year. So, if you really want to save your money from the income tax department, you should definitely consider having a tax free bond. Moreover, these bonds are far better than investing your money in fixed deposits.
Separate a few amount of your money and invest it in your nearest post office. When you are saving an amount in the post office, you are actually saving it for your retirement period. The interest rates have also gone higher recently as it is mentioned in the F.Y. 2014-15.
Investing continuously in PPF
Keep on investing in PPF as the interest rates have gone higher and it has reached 8.7%. PPF is a great idea if you are thinking of saving your valuable money from the tax. Make a separate PPF investment for your kids and your spouse. But remember, it should not increase more than Rs. 1 lakh per annum.
Investing in real estate
Are you still having an apartment on rent? Now it’s the time, you should really think of having your own home. When you are investing in real estate, it helps in tax deduction. You can avail a maximum deduction of Rs. 1.5 lakhs. It is a good idea if you are thinking of buying a property in the name of two or more family members, so that they can also enjoy the tax deduction. But, if you are just buying a land, you are not getting any tax benefits. So, always think of buying a residential property, not just a piece of land.