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In these competitive times, doing things
at the right time makes all the difference. So is it with your tax planning-
timely and periodic tax planning lessens your burden during the financial
year end.
What are your objectives for tax planning?
- Know your tax Liability
- Understand the current regulations
- Awareness about the various Investment options available
- Making the right choice
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| Taxable income slab (Rs.) |
Rate (%) |
Up to 1,60,000(for individuals other than women
and senior citizens)
Up to 1,90,000 (for women below 65 years of age)
Up to 2,40,000 (for Resident Individual of 65 years or above) |
NIL |
| 1,60,001 – 3,00,000 |
10 |
| 3,00,001 – 5,00,000 |
20 |
| 5,00,001 upwards |
30* |
| *Surcharge on Income above 10 L is
removed. |
Note
- Education cess is applicable @ 3 per cent on income tax, inclusive
of surcharge if there is any.
- Agricultural income is exempt from income-tax.
- These calculations are illustrative and based on our understanding
of current tax legislations, which are subject to change.
- Please contact your tax consultant for exact calculations of your tax
liabilities
Insurance
Insurance is designed to offer financial protection for you and your family
during the times of uncertainties. One can choose from a range of traditional
insurance, unit linked and general insurance plans designed to help you with
your savings, retirement, investment, protection needs and also save taxes.
| Income Tax Section |
Gross Annual Salary |
How Much Tax Can You Save? |
HDFC Standard Life Plans |
| Sec. 80C |
Across All income Slabs. |
Upto Rs 30900/- saved on Investments
of Rs 1,00,000/- |
All Life Insurance Plans |
| Sec. 80CCC |
Across All income Slabs |
Upto Rs 30900/- saved on Investments
of Rs 1,00,000/- |
All Pension Plans |
| Sec. 80D* |
Across All income Slabs |
Upto Rs 9,270/- saved on Investments
of Rs 30,000/-
(Inclusive of Rs 15000/- towards health Insurance of parents)
Upto Rs 10,815/- saved on Investments of Rs 35,000/-
(Inclusive of Rs 20,000/- towards health Insurance of parents who
are senior citizens)
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1)All Health Insurance Plans
2)All the Health Insurance Riders available with Conventional Plans |
| Total Savings Possible** |
Rs 41715/-
1) Rs 30,900/- towards Sec 80 C and Sec 80CCC
2) Rs 9,270/- or Rs 10,815/- under Sec 80 D
3) Above figures calculated for a male with gross annual Income exceeding
Rs 5,00,000/- |
| Sec. 10 (10)D |
Under Sec 10(10)D,the benefits received
by you are completely tax-free |
*applicable to premiums paid for all Health Insurance Plans, Critical
Illness Benefits, Accelerated Sum Assured and Waiver of Premium Benefit.
**These calculations are illustrative and based on our understanding of current
tax legislations.
^The above mentioned tax benefits are subject to changes in the tax laws.Please
contact your Tax Consultant for an exact calculation of your tax liabilities.
Mutual
Funds
Equity Linked Saving Scheme (ELSS) is an open-ended equity scheme that is offered by mutual funds in line with existing ELSS rules. The investments under this type of scheme are entitled to deductions u/s 80C of the Income Tax Act, 1961 to such extent (presently Rs.1 lakh) and subject to such conditions as may be notified from time to time. The invested money in ELSS is locked for a period of 3 years i.e., once invested in a ELSS fund, the money cannot be taken out or redeemed for a period of 3 years from the date of investment/allotment of units. Also, it has to be noted that any amount (irrespective whether Rs. 1 lakh or higher) which is invested into these schemes cannot be redeemed for the first 3 years.
ELSS has certain distinct advantages:
- The 3-year lock-in period in ELSS allows the fund manager to build a portfolio for the long-term without worrying about everyday redemptions.
- The profits on the sale of ELSS units are treated as long-term capital gains, and as per current tax laws, these are not subject to tax. Also, there is no dividend distribution tax on equity investments and dividends earned and are tax free in the hands of the investor.
Other Tax Saving Schemes v/s ELSS
| Parameter |
PPF |
NSC |
ELSS |
| Returns |
8% |
8% |
Equity Market linked |
| Tenure |
15 Years |
6 Years |
Minimum 3 Years |
| Minimum Investment p.a. |
Rs. 500 |
Rs. 100 |
Lumpsum: Rs. 500/- |
| Maximum Investment p.a. |
Rs. 70,000 |
No Limit |
No Limit |
Note: Please note, as per Section 80C, an individual will get the tax benefit for a maximum investment of Rs. 1 lakh (in a Financial Year) across any one or all the investment avenues put together.
Making the right choice:
At HDFC Bank we offer a number of advantageous tax saving investment
options. Your Relationship Manager or Branch is well-equipped to help you
with the right investment solutions to suit your particular circumstances
and needs. We understand the value of your hard earned money. Looking forward
to helping you make your money work as hard as you do.
An early beginning ensures a relaxed journey. Start tax planning now!
To know more, walk- in to your HDFC Bank branch or SMS TAXPLN to 5676712.
For Investment Services Account customers, click
here to login to your account.
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