We, at MFPPL provide tax consultancy services to individuals as well as companies and family businesses. We have in house tax consultants in Mumbai who will provide complete tax consultancy services and guide you on every aspect of direct and indrect taxation.
Meaning of Taxation
The word taxation simply means Estimate. Every year the new structure is decided by the finance minister and is released in the Union Budget. Taking an overall view, every individual is bound to pay income tax for the progress of the nation as per the constitution of India. Any individual or organisation earning any income in the country should mandatorily offer that income to income tax for laying down the art of economic and financial administration.
Direct taxes, in addition to financing federal government expenditure, serve several functions. They help in resource allocation, encourage or discourage certain kinds of economic and social behaviour, redistribute income and wealth, stimulate and stabilize economic growth and even help in solving certain specific economic problems such as pollution, shortage of accommodation, and so on, through the mechanism of tax incentives.
Thus, taxation has developed into an instrument that promotes economic growth, stability and efficiency and has become a major device through which governments implement their political thinking and secure the participation of the masses in its policies and progress. A well-administered tax system is a good weapon against many odds. In such a tax system, it is the government, and not the taxpayers, which decides the economic sectors to be assisted and which not to.
Top 7 Tax Saving Instruments in India
Here is a list of some of the best ways to save taxes in India.
1. Equity Linked Savings Scheme (ELSS)
ELSS is an equity-oriented tax saving mutual fund investment scheme which comes under Section 80C of the Income Tax Act, 1961. ELSS comes with a lock-in period of 3 years and the best part is that the returns are relatively higher as compared to the Fixed Deposit schemes or any debt-oriented savings schemes. As per the budget 2014-15, the investment limit of ELSS has increased from INR 1 Lac to INR 1.5 Lac under Section 80C. So, before you decide to invest in ELSS, have a fair idea about the past performance and be ready to take an adequate amount of risk.
2. Public Provident Fund (PPF)
PPF is the only financial instrument having an EEE (Exempt Exempt Exempt) tax status, which essentially means, including the investment amount, the interest rate as well as the maturity amount, all is tax free. You could make an investment of up to INR 1.5 Lac which will give you an interest of 8.7% annually. You could even start taking loans at the beginning of the 3rd year to the end of the 5th year, and withdrawals from the 6th year onwards. The only thing you need to be cautious about is to make your investment before 5th of a month, beyond that you would lose the interest accumulated for that month.
3. National Savings Certificate (NSC)
NSC is another tax saving instrument issued by the Indian Postal Services. NSC comes with a lock-in period of 5 years and 10 years that offers guaranteed returns on maturity. However, the interests earned varies on one-to-one income slab and there is no tax deduction at source.
4. Rajiv Gandhi Equity Savings Scheme (RGESS)
RGESS is a 1 year lock-in period tax saving instrument that has been introduced to encourage investments in specified mutual funds or stocks. You can invest up to INR 50,000 out of which 50% could be used for tax benefits under Section 80C. Hence, making a small investment with a short lock-in period would help the first time investors understand the equity culture more effectively.
5. EPF Contribution
Always consider your EPF Contribution first before you choose any tax saving instruments for deduction under Section 80C, since it is a mandatory deduction for many organizations these days. In case, your contribution exceeds INR 1 Lac as per the IT Department, it is advisable to not look for other deductions like NSC, PPF, life insurance, etc.
6. Life Insurance
Life Insurance is another tax exempting instrument which not only guarantees returns on maturity, but also provides a life coverage for you and your family in times of uncertain life events. The overall exemption available under Section 80C, 80CCC, 80CCD is INR 1 Lac annually.
7. Tax Saver Fixed Deposits
Under Section 80C, Fixed Deposits with any bank for a minimum lock-in period of 5 years is tax exempted. You could invest up to INR 1.5 Lac (as per the budget 2014-15) to get the tax benefits under this section. This may include instruments like Provident Funds & Life Insurance.
What Does Our Tax Consultancy Services Involve?
Our in house TAX expert will guide our clients on general and specific queries related to Taxation .The query can be related to Tax Saving Instruments, TDS, Service TAX, Calculation of Capital gains on sale of Property. Our tax services can help you by:
Reduce your Tax Burden through Planning;
Calculation of Capital Gains on Sale of Property;
Calculation of Capital Gains on Sale of Mutual Funds;
Negotiating a Salary Package with your Existing / New Employer;
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