Everything You Need To Know About
Tax Planning

Many of us engage in an economic activity and work really hard to make a living.

But as we work hard to make a living, it becomes imperative for us to work a little more harder and smarter to save our taxes (the legal way) too.

You see, very often it is seen that many individuals (especially the younger ones) keep their tax planning exercise pending till the eleventh hour.

They prefer splurging on things of materialistic interest which leads them to sub-optimally save tax.

Hence, today in this guide we will take you through the concept of Tax Planning in detail.


CHAPTER 1: What is Tax Planning?

History of Indian taxation is as old as 2300, years old.

Even today being a law-abiding citizen, you ought to pay your taxes on or before time each financial year.

Though tax payments are certain, many wait till wait till the eleventh hour to undertake your tax planning exercise.

Mind you, paying tax is not a one-day activity.

Let’s dive in to learn everything you need to know about tax planning


Tax planning is an exercise performed to meet your tax obligations in a systematic manner keeping in mind your current financial status. Further, it includes your larger financial plan after calculating your age, financial goals, risk appetite, and investment horizon.

Tax as you would know is a fee charged by the government on a product, service, or income.

It is an obligatory payment made by citizens to the government.

For this reason, you can aim to reduce your tax liability and protect their hard-earned money.

You can lower your total tax outflow by accounting for all payables, permissible exemptions, deductions, and reliefs available to you under the Tax Act. Hence, tax saving activity is part of the whole tax planning exercise, whereby you as a tax payer can reduce your total tax liability.

But many a times, tax payers in order to save tax make investments without being aware about the financial product. And end up investing in inefficient tax saving instruments.

Therefore, tax planning exercise is as crucial as you plan for your other financial goals. And remember to commence your “tax planning” exercise well in advance and complement this with your overall investment planning exercise.

By adapting to this method of “tax planning”, you not only ensure long-term wealth creation, but also protect your capital. It will enable you to save more through tax planning and fulfil many of your dreams in life.

Our experience reveals 4 mistakes highlighted in the next chapter which each tax payer must avoid.


CHAPTER 2:4 Common Tax Planning Mistakes


Read this chapter and avoid the 4 most common mistakes which tax payers commit:

Remember, waiting till the eleventh hour is just going to lead you to a path of sub-optimal tax planning exercise, which defeats the true essence of a holistic tax plan.

  1. Procrastination

    The root of all mistakes in tax planning — procrastination, which eventually leads to merely tax saving, rather than optimally planning for your taxes. Your haste often gets you to forget or ignore the other facets of financial planning such as your age, income, ability to take risks and prioritising financial goals.

  2. Buying unnecessary insurance products for tax saving

    As you near the end of the financial year, many of you might have received telephone calls from insurance companies and agents pestering you to buy an investment-cum-insurance plan – typically market linked i.e. Unit Linked Insurance Plans (ULIPs) or some kind of Endowment plans. Realising the need to save your taxes, you may've even entertained these calls and eventually doled a cheque to buy one. But, have you introspected whether you've done the right thing? Maybe no; either because of unawareness or in the urgency to save tax.

    Remember when you think about insuring yourself, buy a pure term insurance plans only.

  3. Power of compounding through tax saving mutual funds

    Many individuals rule out the concept of power of compounding to the portfolio despite the fact that age, income, ability to take risk, along with financial goals may support you to take risk.

    It is noteworthy that if you want to meet and / or elevate your standard of living going forward, you need to beat the rate of inflation. And thus, the role of equity as an asset class cannot be ignored in one's tax saving portfolio too. While some do consider – equity oriented tax saving mutual funds in their tax saving portfolio, the ideal composition (depending on the risk appetite) is not maintained, which leads the tax saving portfolio to give sub-optimal returns.

    We appreciate that some investors are risk averse. But if your age, income, and investment horizon permit you to take equity exposure, take a calculated leap of faith.

  4. Failing to optimise all available options for tax saving

    For many, tax planning starts as well as ends with Section 80C of Income-tax Act, 1961- which enunciates investment instruments for tax saving. But investing only in these investment instruments would not lead to optimal reduction of your tax liability.

    Therefore, look beyond Section 80C and avail for most of the tax saving investment opportunities possible.

Avoid these mistakes and follow 3 simple steps of tax planning exercise:


CHAPTER 3:3 – Step Tax Planning Process

“It is better to take many small steps in the right direction than to make a great leap forward only to stumble backward”

This old Chinese proverb in our opinion applies even to your “tax planning” exercise.

Remember, it is vital for you to step-by-step ascertain where you stand, in terms of your Gross Total Income and Net Taxable Income. By doing so you can create much effective tax plan. This in turn would deliver you the objective of long-term wealth creation along with capital protection.

Hence, we are laying down a 3-step process of tax planning:


Step 1: Compute the Gross Total Income

The process of tax planning begins with computation of your Gross Total Income (GTI). This step enables you to ascertain the total income earned by you during a financial year, from various under-mentioned sources of income, and helps you to judge where you stand.

  • Income from salary

  • Income from house property

  • Profits and gains from business & profession

  • Capital gains (short term and long term); and

  • Income from other sources.

Hence, GTI is the total income earned by an individual before availing any deductions under the Income Tax Act, 1961. To undertake your tax planning effectively use the relevant provisions of the Income Tax Act applicable to the various sources of income, as well as by availing deductions to GTI.

Now, one may ask – “how do I undertake this activity if I’m a novice?”

Well, the answer is pretty simple! You can either get it done at the company you work for, ask your CA / tax consultant to do it, or use the convenience of the new and updated tax portals that have emerged in the more recent times.

It is vital to know at least those provisions of the Income Tax Act, which directly have an impact on your personal finances. 

Step 2: Compute the Net Taxable Income

Once you are done with computation of GTI by using the relevant provisions of the Income Tax Act for each source of income, the next step is to compute your Net Taxable Income (NTI).

Under NTI from the GTI, the various deductions under chapter VIA which allow for deduction under Section 80 of the Income Tax Act, should be accounted for (i.e. subtracted from your GTI), which would thus reduce your taxable income. The following deductions enable you to reduce tax liability, as it covers Sections for:

  • Investing in tax saving instruments (under the popular Section 80C)

  • Premium payment for your medical insurance

  • Expenditure on handicapped dependent

  • Interest paid on loan taken for higher education

  • Donations

  • Rent paid for residential accommodation

  • Expenditure incurred on specified diseases suffered by you

  • …and many more!

Remember, if you use the respective provisions effectively to do tax planning, it will enable you to achieve the long-term objective of wealth creation.

Step 3: Calculate the tax payable

After having effectively saved tax in the prudent way mentioned above, the next step is to compute your tax liability based on the present income tax slabs.

The income tax rates for Individuals and HUFs for FY 2017-18 are as follows:

Net Taxable Income (in Rs)


Upto Rs 2,50,000 [For individuals (including NRIs / PIOs and HUFs)


Upto Rs 3,00,000 (for Resident Senior Citizens 60 years and above but below 80)

Upto Rs 5,00,000 (for Resident Super Senior Citizens aged 80 and above)

Rs 2,50,001 to Rs 5,00,000 #


Rs 5,00,001 to Rs 10,00,000##


Above Rs 10,00,000


Source: Finance Act 2017, Personal FN Research)

*Additional surcharge @ 10% of income tax, where total income exceeds Rs 50 lakh up to Rs 1 crore. 15% surcharge would be levied if your total income in the financial year exceeds Rs 1 crore. This one-time surcharge will be in addition to the total 3% education cess that is paid on the total income-tax.
#For Resident Senior Citizens of 60 years of age and above but below 80 years of age, the slab is between Rs 300,001 to Rs 5,00,000 taxable @ 5%.
##For Resident Super Senior Citizens aged above 80 years, the second slab is between Rs 500,001 to Rs 10,00,000 taxable @ 20%.

From the financial year 2017-18, the eligible income for Tax Credit or Special Rebate under Section 87A is Rs 3.5 lakh. The maximum rebate is now Rs 2,500, down from Rs 5,000 earlier.

So, if your tax liability is say Rs 1,500, you will get a tax credit of only Rs 1,500 under Section 87A and no tax will be payable.


CHAPTER 4:Parameters For Smart Tax Planning


A smart way of tax planning includes appropriate investment planning.

This plan will accommodate your ideal asset allocation by considering the under-mentioned factors.

Hence, after you have utilised the tax provisions within each head / source of income for effective reduction in GTI, you must also consider the following parameters as these will enable you to optimally reduce your total tax liability.

Smart Tax Planning
The chart depicted is for illustrative purpose only.
(Source: Personal FN Research)
  • Age

    Your age and the tenure of the investment instrument play a vital role in your asset allocation. The younger you are more risk you can take and vice-a-versa.

    Hence, for prudent tax planning too, if you are young, you should allocate more towards market-linked tax saving instruments such as Equity Linked Saving Schemes (ELSS), Unit Linked Insurance Plans (ULIPs) and National Pension System (NPS).

    As at a young age the willingness to take risk is generally high. One may also consider taking a home loan at a younger age, as the number of years of repayment is more along with your willingness to take risk being high.

    Another noteworthy point is that the earlier you start with your investments, the greater is the tenure you get while investing in an investment avenue, which can enable you to make more aggressive investments and create wealth over the long-term to meet your financial goals.

    Let's understand this much better with the help of an illustration.

    An early bird gets a bigger pie





    Present age (years)




    Retirement age (years)




    Investment tenure (years)




    Monthly investment (Rs)




    Assumed Returns per annum




    Sum accumulated (Rs)




    Note: The names and returns mentioned above are an assumption and used for illustration purpose only

    The table reveals that, if Suresh starts at age 25, and invests Rs 7,000 per month in an ELSS / Tax saving mutual fund scheme through SIPs (Systematic Investment Plans) until retirement (age 60). His corpus at retirement will be approximately Rs 2.65 crore at an assumed rate of return of 10% p.a. If Mahesh starts at age 30, a mere 5 years after Suresh, and invests the same amount in ELSS (through SIPs) until retirement (also at age 60). His corpus will build up to approximately Rs 1.58 crore at same assumed rate of return, note the difference between the two corpuses here. And lastly, we have Rajesh, the late bloomer of the lot. If he begins investing at age 35, the same amount every month in an ELSS as Suresh and Mahesh, and invests up to his retirement (also at age 60); his corpus will be, in comparison, a meagre Rs 92 lakh.

    The following graph clearly indicates the gap between the accumulated corpuses for similar level of investment per month and assumed rate of return.

  • Income

    Similarly, if income is high, willingness to take risk is also high. This can work in your favour, as you have sufficient annual GTI which allows you to park more money towards market-linked tax saving investment instruments, which have potential of generating higher returns and creating a good corpus for your financial goal(s).

    Similarly, if your income is not high enough or if you do not want to put your money at risk; you can invest in tax saving instruments that provide you assured returns. These instruments can be Public Provident Fund (PPF), National Savings Certificates (NSCs), 5 Yr Bank Fixed Deposits, 5 Yr Post Office Time Deposits and Senior Citizen Savings Scheme (provided you are a senior citizen).

  • Financial goals

    The financial goals, which one sets in life, also influence the tax planning exercise. So, say for example your goal is retiring from work 5 years from now, then your tax saving investment portfolio will also be less skewed towards market-linked tax saving instruments, as you are quite near to your goal and your regular income would stop.

    Likewise, if you are many years away from your financial goal, you should ideally allocate maximum allocation to market linked tax saving instruments and less towards those tax saving instruments which provide you low assured returns. 

  • Risk appetite

    Your willingness to take risk, which is a function of your age, income, expenses, nearness to goal, will be an important determinant while doing your tax planning exercise.

    So, if your willingness to take risk is high (aggressive), you can skew your tax saving investment portfolio more towards market-linked instruments. Similarly, if your willingness to take risk is relatively low (conservative), your tax saving investment portfolio can be skewed towards instruments which offer you assured returns.

    And if you are a moderate risk taker you can take a mix of around 60:40 into market-linked tax saving instruments and assured return tax saving instruments respectively.

Now that you understand about tax planning, let us now look at various avenues through which you can reduce your tax outlays. This is called as tax saving:


CHAPTER 5:Save Tax Under Section 80C


Section 80C of the Income Tax Act enables an Individual or a Hindu Undivided Family (HUF) to effectively invest in tax saving instruments, in order to optimally reduce their tax liability. This is seen as one of the most sought after sections when it comes to tax planning.

In order to leave more money in the hands of the salaried class, hit by rising prices, the deduction limit under this section is currently at Rs 1.50 lakh p.a.

The Section offers you host of popular investment instruments such as NSC, PPF, Life Insurance premiums, etc. which qualify you for a deduction from your Gross Total Income (GTI).

But we believe that rather than just merely investing in any of the above tax saving instruments, you can also use these tax saving instruments for prudent tax planning.

Now you may ask “how”?

Well, it’s simple! First ascertain which investment instrument suits you the best (taking into account the parameters mentioned above) and then extend your tax planning exercise to investment planning too.  You can then classify the tax saving instruments into those offering variable returns (i.e. market-linked instruments) and those offering fixed returns (i.e. assured return instruments).

Let’s discuss in detail the classification into market-linked tax saving instruments and assured return tax saving instruments.


Do not exhaust yourself with so many tax saving options available under Section 80C. Because the next chapter throws light on ways to save tax using options beyond Section 80C.

To read extensively on Section 80C, click here.


CHAPTER 6:Think Beyond Section 80C


Options Galore - Snapshot of deduction under other 80s


Quick Description of Deduction


Key investment instruments eligible for deduction under this Section include – Equity Linked Savings Scheme (ELSS), Public Provident Fund (PPF), EPF (Employee Provident Fund), NSC (National Saving Certificate), Senior Citizen Savings Scheme (SCSS), 5-year tax saving bank fixed deposits, 5-year Post Office Time Deposit (POTD), premium paid for life insurance plans, housing loan principal repayment, etc.


Contribution to Pension Fund of Life Insurance Corporation or any other insurer referred in section 10(23AAB).


Contribution to Pension Scheme (National Pension Scheme) notified by Central Government. Additional deduction of up to Rs 50,000 is allowed for contribution towards NPS which is over and above the limit of Rs 1.5 lakh under section 80 CCD(1B).


Rajiv Gandhi Equity Savings Scheme (RGESS)


Premium paid for medical insurance


Maintenance including medical treatment of a handicapped dependent who is a person with disability


Expenditure incurred in respect of medical treatment


Interest on loan taken for pursuing higher education 


Donations to certain funds and charitable institutions


Rent paid in respect of property occupied for residential use


Certain donations for scientific research or rural development


Contribution made to any political parties or electoral trust


Deduction in respect of interest earned  on savings bank deposits


Person suffering from specified disability(s)

*The deduction limit is upto Rs.1.5 lakh aggregated across section 80C, 80CCC, 80CCD
Note: The list is not exhaustive, but only indicative
(Source: Personal FN Research)

Click here to read on All You Need to Know About Section 80D

You can also download our latest exclusive Tax Planning Guide here.


CHAPTER 7:Save Tax On Your Salary


While many of you in employment take enormous efforts to earn a salary, it is also equally important in our opinion that you restructure your salary well, in order to save tax on your hard-earned salary. And mind you, if you do so you’ll have a greater “Net Take Home” (NTH) pay, which will allow you to streamline your finances well.

It is important that one looks at the various components of salary in order to avail tax benefits on the same. The vital component of salary, where restructuring may be required is as under:

  • Basic Salary:

    While this is the base of your head of income – “income from salary”, it is important that you have your basic salary set right. This is because the basic salary constitutes 30% – 40% of your Cost-to-Company (CTC). So, having a very high basic component may lead to having a high tax liability in absolute Indian rupee terms. On the other hand, if you reduce your basic salary considerably, you would lose out on the other benefits such as Leave Travel Allowance (LTA), House Rent Allowance (HRA) and superannuation benefits associated with your basic.

  • House Rent Allowance (HRA):

    If you are paying rent for an accommodation, and if your organisation extends you HRA benefits, then this is another vital component that can help you to reduce your tax liability. But it should be noted that you cannot pay rent for the house which you own and if you are residing in it.

    Hence, now on the other hand if you are staying in a rented house and you are the one paying the rent, then HRA exemption [under Section 10(13A)] can be availed for the period during which you occupy the rented house during the financial year.

    However, in order to obtain an exemption, you are required to submit appropriate and adequate proof of payment of rent for the entire period for which you want to claim exemption. But, if you as an employee are getting an HRA of less than Rs 3,000 per month, you are not required to provide a rent receipt to your employer.

    You may also like to read HRA Tax Implications: All You Need To

  • Leave Travel Concession (LTC):

    While you may be fond of opting for a leave and travel with your family for a holiday, don’t forget to assess what tax benefits are extended to you for doing so.

    The Income Tax Act provides you tax concession if you have actually incurred expenditure on your travel fare anywhere in India, either alone or along with your family members (i.e. your spouse, children, parents, brothers and sisters who are mainly or wholly dependent on you).

    But such exemption is limited to the extent of actual expenses incurred i.e. you can claim exemption on the LTC amount OR the actual amount incurred, whichever is lower.

  •    Education and Hostel allowance:

    If you are married with kids, and if your employer is providing with education allowance, then do not refrain from availing it, as this can again help you in reduction of your tax liability. The exemption extended to you under the Income Tax Act is Rs 100 per month for a maximum of two children (i.e. in other words Rs 2,400 p.a. totally).

    Similarly, if your children are staying in a hostel then a maximum of Rs 300 per month per child but subject to a maximum of two children will be available to you as an exemption (i.e. Rs 7,200 per annum).

  • Meal Allowance through Food Coupons / Food Cards:

    While you may be tempted to increase your NTH you should not ignore to avail the food coupon / food card benefit, if your employer provides one. This is because, effective utilization of the same will enable you to effectively reduce your tax liability along with getting the feeling of being pampered by your employer.

    The exemption amount which you can enjoy is Rs 50 per meal available only in respect of meals during office hours.

    However, the exemption is also available in case your employer provides you food vouchers / cards of value of which can be used at eating joints. The exemption limit in this case is restricted to Rs 2,500 per month for a food voucher / card value.

    So, remember if your employer is providing you food coupon / card don’t refrain from availing the same for a maximum voucher value of Rs 2,500 every month.

  • Medical reimbursement:

    During the year if you and / or your family members have visited a doctor or bought medicines from a chemist, all the expenditure incurred by you and / or your family members during the year for medical purpose too would help you in reducing your tax liability.

    As per the Income Tax Act, the maximum amount of deduction available with you is Rs 15,000 for every financial year, and to claim the same you are required to submit, to your employer, the medical bills for the financial year stating the amount in total which you intend to claim.

    Now that you’ve learnt to save tax on your salary, let’s move on to see how mutual funds can help you save tax in the next chapter.


CHAPTER 8:Tax Implication of Investing in Mutual Funds


Every mutual fund investment may have tax implications. This depends on the nature of the asset and the period of holding. Unfortunately, prior to investing in mutual funds, specifically debt or non-equity mutual funds, many ignore the implications of capital gains tax on their investment. Capital gains tax on mutual fund holdings is established upon whether you hold equity oriented funds or non-equity oriented funds.

Equity oriented funds are defined as those in which 65% of the investible corpus in invested in Indian equities.

Non-equity funds are those which invest less than 65% in Indian equities – these include debt funds (such as income funds, liquid funds, gilt funds, floating rate funds, Fixed Maturity Plans (FMPs), Monthly income Plans, (MIPs), Gold ETFs and so on. Notably, even fund-of-funds that may invest indirectly in Indian equity through other mutual funds are not considered as equity funds.

Tax Rates for 2017-18



Domestic Company


Equity Oriented Schemes

LTCG (units held for more than 12 months), STCG (units held for 12 months or less)






15%+ Surcharge as applicable + 3% Cess

15%+ Surcharge as applicable + 3% Cess

15%+ Surcharge as applicable + 3% Cess

Non-equity Oriented Schemes

LTCG (units held for more than 36 months), STCG (units held for 36 months or less)


20% with indexation + Surcharge as applicable + 3% Cess

20% with indexation + Surcharge as applicable + 3% Cess

20% with indexation + Surcharge as applicable + 3% Cess


30%^ + Surcharge as applicable + 3% Cess

30% + Surcharge as applicable + 3% Cess

25%^^^ +Surcharge as applicable + 3% Cess

30%^ + Surcharge as applicable + 3% Cess

*^ - Assuming the investor falls into highest tax bracket.

^^^-If total turnover or Gross receipts during the financial year 2015-16 does not exceed Rs. 50 crores.

(Source: Personal FN Research)

This table gives you a brief idea about taxation with mutual funds. You can simply contact us at 022 6136 1200 and ask for genuine help on tax planning this season.


CHAPTER 9:Penalties For Non-filing of Returns / Non-payment of Taxes


As can be seen in the table above, for equity oriented funds, while the capital gains tax implication for long term capital gains (LTCG) are nil, Short Term Capital Gains (STCG) are taxed at 15%. 

For non-equity oriented funds, long-term capital gains are taxed at 20% with indexation. Indexation lets an individual adjust the purchase price of the mutual fund units by taking into account inflation, thus enabling them to reduce your tax outgo.

Short-term capital gains for non-equity oriented funds are added to the total income and taxed as per one's tax slab, which means that if the 30% tax bracket applies to you, short-term capital gains arising from the sale of your mutual fund units will be taxed at 30%. This means that the tax is calculated on mutual fund units on a First-in-First-out basis. So, if you have invested via a Systematic Investment Plan (SIP), do pay attention to check that the units you are redeeming met the requisite tax guidelines.

Missing the deadline for filing I-T returns can give you sleepless nights. Here are some vital points that talk about the consequences that you as an individual assesse might face if you don't file your returns and / or pay your taxes on time…

  • What if you missed your tax filing deadline:

    A belated return (tax returns filed after the due date) attracts a penalty and interest. Under Section 234F of the Income Tax Act) there will be two set of penalties, first, a Rs 5,000 penalty for belated returns filed on or before December 31 for that assessment year and Rs 10,000 for any other case. For small taxpayers whose total income does not exceed Rs 5 lakh, the penalty amount is reduced to Rs 1,000. Apart from this, under Section 234A, interest would be levied @1% per month, calculated from the due date.

    Under Section 234A, interest would be levied @1% per month, calculated from the due date. In addition to this, if you are unable to file your returns before the end of the assessment year, i.e. March 31, 2018, a fine of Rs 5,000 may still be applicable.

    An assessing officer may, at his discretion, charge a fine of Rs 5,000 under Section 271F of the Income Tax Act.

    Section 271F states, if one fails to furnish tax returns before the end of the relevant assessment year, the Assessing Officer may direct that person to pay a penalty of Rs 5,000. Thus, if you are filing a belated return for AY2017-18, make sure to do it before March 31, 2018, to avoid the probability of an additional penalty.

    From next year onwards, ensure to file tax returns well in advance, because a window of opportunity to avoid the fine will not exist. After April 1, 2018, the new Section 234F, in respect of penalty for delay in furnishing return, will come into effect, while the provisions of Section 271F shall cease to exist.

    Under Section 234F, belated returns filed after December 31st of the relevant assessment year will attract a fine of Rs 10,000. For returns filed after the due date but before December 31st of the assessment year, there is a  penalty of Rs 5,000. However, for individuals with a total income less than Rs 5 lakh, the penalty will be Rs 1,000. Under this section, not only are the fines steeper and applicable immediately after the due date, but the assessing officer plays no role in deciding the applicability of the penalty.

    Thus, from the next assessment year onwards, if you delay filing your income tax returns, along with the tax and interest payable, a fee for delayed furnishing of return of income will be applicable.

  • What if you haven't paid your tax due on time:

    If you haven't paid your tax due on time, then a penal interest of 1% per month (simple interest) will be levied on the amount of tax due or balance tax payable from the due date to the actual date of filling of your returns. However, if you are lucky enough to have no tax payable, you won't be liable to pay any interest even if you file your return after due date but before the end of relevant assessment year. 

  • Did you miss paying your advance tax:

    If the amount of tax that you are liable to pay exceeds Rs 10,000, then advance tax needs to be paid in 3 instalments.

    • The first due date is September 15, where you are required to pay at least 30% of the tax payable as advance tax.

    • The second due date is December 15, where at least 60% needs to be paid.

    • And the third instalment, is on March 15, where 100% of the tax payable needs to be paid.

    • If you defer any of these payments, then a simple interest of 1% per month would be levied as penalty. 

    Hence, make sure that you file your I-T returns and pay your taxes before the due date. Filing I-T returns apart from being viewed as a legal responsibility, should also be considered as a moral responsibility. It earns you the dignity of consciously contributing to the development of the nation. This apart, your I-T returns validate your credit worthiness before financial institutions and make it possible for you to access many financial benefits such as bank credits etc.

    Even if you aren't earning income that comes under the tax bracket; it is always advantageous to file your returns. But while you do so, make sure the correct form is filed.


CHAPTER 10:Conclusion

Tax planning as an exercise is not just limited to filing returns and paying taxes.

It is a process whereby your larger financial plan needs to be taken into consideration after accounting for the above-mentioned factors.

Do not hesitate to look beyond Section 80C. You can smartly access the deductions available under Section 80 and the exemptions too, to save tax legitimately.

Remember to effectively know and structure each component of your salary income to effectively save more tax.


In this guide, we have seen that your extra step towards the tax planning way would enable you to wisely reduce your tax liability.

Remember waiting till the eleventh hour to do your tax planning exercise, is not going to help in a big way. It would just lead to “tax saving and not “tax planning”.

Just to reiterate, while you have host of tax-saving investment options available under Section 80C, following an asset allocation model (for your tax planning exercise), in accordance to your age, ability to take risk and investment horizon is going to make your tax saving portfolio look more prudent.

While you must take help of your tax consultant while filing your returns and seek his/ her opinion, a self-study approach on your tax planning exercise is also necessary as one should be well versed with at least those tax provisions which affect you directly.

And with that note we wish you all Happy Tax Planning!!

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