Income tax saving- If more tax is deducted, you can claim the refund by filling the income tax return. However, there may be a mismatch in Form 16.
In the month of February-March, salaried professionals have to submit income tax saving investment proof. According to tax expert Gauri Chadha, if the investment is done then submit it on time, otherwise the employer will deduct more tax without tax deduction and less salary will come in your hands. If more tax is deducted, you can claim the refund by filling the income tax return. However, in the Form 16, the mismatch can come up. In such a situation, the Income Tax Department can send a notice.
Submit investment proof on time and if tax saving investment is not completed then check out these 5 options-
1.Life Insurance
Under Section 80C of the Life Insurance Income Tax, the taxpayer gets a deduction of Rs 1.50 lakh, with tax exemption on the insurance premium payment. If you do not have life insurance, then you can buy a term insurance. But, keep in mind that you do not buy insurance that is promising to give you returns. You have to buy term insurance covering simple life. If there is term insurance, do not buy any other type of insurance just to save tax.
2.If the small saving scheme is
insurance, then you can save tax by investing in the small savings scheme of the government. In these schemes there is a tax rebate along with compounding interest. You can get a National Savings Certificate from the post office which keeps a lock-in of five years and can open 6.8% interest or a recurring deposit account, at the rate of compounding, a return of 5.8% will be given. Public Provident Fund (PPF) account can be opened in a bank or post office. PPF accounts mature in 15 years. Interest of 7.10% is being received on this investment.
3. Equity Linked Savings Scheme (ELSS)
If you want to make an investment that gives you equity market returns and tax rebate, then you can invest in tax saving equity mutual funds. 80 per cent of these funds are invested in equities. Whether you do SIP (small installments) or pay a lump sum, you can take advantage of 80C deduction by reducing the amount of investment from your income. Just keep in mind that there is a lock in of 3 years in ELSS and every SIP will be matured in a cycle of one year.
4. Health insurance
there is no health insurance insurance, you can claim an additional rebate of 80C by paying a health insurance premium of up to Rs 25,000. If you pay health insurance premiums for parents too, then these discounts can be taken up to Rs 50,000.
5.National Pension System (NPS)
Savings and Tax Exemptions for National Pension System (NPS) Retirement – On NPS investment you get an additional exemption of up to Rs 50,000 under section 80 CCD 1 (B). You can invest in pension funds linked to equity and debt by depositing money in pension account. You get returns in terms of the performance of the fund. After the age of 60 years, you can withdraw 60% of your tax-free money, the remaining 40% will be received through annuity plan. So make tax saving investment and along with returns, take benefits like life cover, health cover or pension.
