What is Tax Planning?

Tax planning is the legal arrangement of your financial affairs to minimize tax liability while maximizing wealth creation. It's not about evading taxes—it's about using government-approved deductions, exemptions, and investment schemes to reduce your taxable income and save money.

Most salaried Indians overpay taxes because they don't plan properly. A ₹12 lakh annual income can have tax liability of ₹95,000 or ₹30,000—depending on how well you structure your investments. That's ₹65,000 saved annually, or ₹19.5 lakhs over 30 years! We help you save maximum tax while building long-term wealth through smart investments.

Tax Savings Potential

₹12 lakh income (old regime): Without planning = ₹95,000 tax. With planning = ₹30,000 tax. Save ₹65,000/year!

Section 80C: ₹1.5 lakhs deduction = ₹46,800 tax saved (at 31.2% rate)

NPS (80CCD): Extra ₹50,000 deduction = ₹15,600 tax saved

Health Insurance (80D): ₹25,000-50,000 deduction = ₹7,800-15,600 tax saved

Total potential savings: ₹70,000-80,000 per year through proper planning!

ELSS Funds

Tax-saving equity funds with 3-year lock-in. Save tax under 80C while building long-term wealth with 12-15% returns.

NPS & PPF

National Pension System offers extra ₹50k deduction. PPF gives tax-free interest with 7.1% returns and EEE status.

Insurance Planning

Term insurance, health insurance premiums qualify for deductions. Get coverage while saving tax under 80C and 80D.

Tax Optimization

Annual tax planning, HRA optimization, LTA claims, Form 12BB guidance, and choosing right tax regime for maximum savings.

Major Tax Deduction Sections You Should Know

Complete guide to all tax-saving opportunities available to you

80C

Section 80C - ₹1.5 Lakh Limit

The most popular tax-saving section. Investments and expenses eligible for deduction:

  • ELSS Mutual Funds: Best option - equity returns + tax saving + only 3-year lock-in
  • PPF: 15-year lock-in, 7.1% tax-free returns, EEE benefit
  • EPF: Employee contribution qualifies, 8.25% returns
  • Life Insurance Premium: Term/traditional policies
  • Home Loan Principal: Repayment qualifies
  • Sukanya Samriddhi Yojana: For girl child, 8% returns
  • Children's Tuition Fees: Up to 2 children
  • NSC, FD (5-year): Safe but lower returns
CCD

Section 80CCD(1B) - Extra ₹50,000

Additional deduction OVER AND ABOVE Section 80C limit by investing in National Pension System (NPS). Total deduction possible = ₹1.5L (80C) + ₹50k (80CCD) = ₹2 lakhs! This saves ₹15,600 extra tax at 31.2% rate. NPS is market-linked, offers equity/debt options, and builds retirement corpus.

80D

Section 80D - Health Insurance

Deduction for health insurance premiums paid:

  • Self, Spouse, Children: ₹25,000 (₹50,000 if any senior citizen)
  • Parents (below 60): Additional ₹25,000
  • Parents (senior citizens): Additional ₹50,000
  • Maximum possible: ₹1 lakh (if you and parents both senior citizens)
  • Preventive Health Checkups: ₹5,000 (included in above limits)
24B

Section 24(b) - Home Loan Interest

Deduction on home loan interest paid:

  • Self-Occupied Property: Up to ₹2 lakhs per year
  • Let-Out Property: Entire interest amount (no limit)
  • Note: Principal repayment goes under 80C (₹1.5L limit)
80E

Section 80E - Education Loan Interest

Full interest paid on education loan is deductible. No upper limit! Available for 8 years from the year you start repayment. Applies to self, spouse, children, or student for whom you're legal guardian. Only interest qualifies, not principal.

10

Section 10 - Tax-Free Income

Income that is completely exempt from tax:

  • HRA (10(13A)): House Rent Allowance based on actual rent paid
  • LTA (10(5)): Leave Travel Allowance for domestic travel (twice in 4 years)
  • Standard Deduction: ₹50,000 for salaried individuals
  • LTCG on Equity: Long-term capital gains up to ₹1.25 lakhs tax-free

Common Tax Planning Mistakes

Avoid these costly errors that result in overpaying taxes

❌ Last-Minute Rush in March

Scrambling to invest in March to save tax. This forces you into poor investment choices—expensive insurance policies, low-return FDs, unsuitable products. Start planning in April itself. Spread investments monthly through SIPs for better returns and discipline.

❌ Buying Traditional Insurance for Tax Saving

ULIPs and endowment plans give 4-6% returns after charges—terrible wealth creation. Buy pure term insurance for protection (much cheaper) + ELSS funds for 80C deduction (12-15% returns). Don't mix insurance and investment.

❌ Not Using the Extra ₹50k NPS Deduction

Missing 80CCD(1B) benefit. This saves ₹15,600 tax at 31.2% rate. Even if you've exhausted ₹1.5L under 80C, invest in NPS for additional deduction. It's market-linked, flexible (equity/debt options), and builds retirement corpus.

❌ Ignoring Health Insurance Deduction

Not claiming 80D for health insurance premiums. You need health coverage anyway—why not save tax too? ₹25k-50k deduction possible for self, plus another ₹25k-50k for parents. Many miss this entirely or under-utilize it.

❌ Choosing Wrong Tax Regime

Not comparing old vs new tax regime annually. Old regime has deductions but higher rates. New regime has lower rates but no deductions. Optimal choice depends on your investment behavior. We calculate which saves more for your specific situation.

❌ Not Optimizing HRA & LTA Claims

Salaried employees miss HRA deduction by not having rent receipts/agreement. Or not claiming LTA (₹50k-1 lakh exemption) for family travel. These are tax-free allowances—use them! We guide on documentation needed for proper claims.

Expert Tax Planning = Maximum Savings

Our tax planning service ensures you use every available deduction legally while building wealth through optimal investments.

Get Personalized Tax Plan

Our Tax Planning Process

Comprehensive approach to minimize tax while building wealth

1

Income & Tax Assessment

Analyze your salary structure, allowances (HRA, LTA, special allowances), other income sources (interest, capital gains, rental). Calculate current tax liability under old and new regimes. Identify all eligible deductions you can claim.

2

Investment Planning for Tax Savings

Design investment strategy to maximize deductions: ₹1.5L in 80C (prefer ELSS for returns), ₹50k in NPS (80CCD), health insurance for 80D. Balance tax savings with wealth creation—not just FDs and insurance, but equity funds for long-term growth.

3

Regime Selection Strategy

Compare old vs new tax regime for your situation. Old regime better if you invest ₹2+ lakhs annually in 80C/NPS/insurance. New regime better if you prefer simplicity and don't invest much. We calculate exact tax under both and recommend optimal choice.

4

HRA, LTA & Allowance Optimization

Guide on maximizing HRA exemption (rent agreement, receipts). Plan LTA claims for family vacations. Restructure salary if needed—convert taxable allowances to tax-free components. Help with Form 12BB submission to employer for proper TDS calculation.

5

Tax-Loss Harvesting

Actively monitor capital gains from stocks/mutual funds. Book losses before year-end to offset gains and reduce tax liability. Immediately reinvest in similar funds to maintain exposure. This tax-alpha can save 10-15% of gains amount.

6

ITR Filing Support

Provide all necessary investment proofs, capital gains statements, and deduction documents. Guide on which ITR form to use (ITR-1, ITR-2, ITR-3). Review draft ITR for accuracy before submission. Ensure you claim every eligible deduction.

7

Annual Review & Adjustment

Review tax plan every April when new financial year begins. Adjust for salary changes, new income sources, changed tax laws. Optimize quarterly advance tax payments if applicable. Ensure you're always paying minimum tax legally.

Sample Tax Savings Calculation

See how much you can save with proper tax planning

❌ Without Tax Planning

Gross Salary ₹12,00,000
Standard Deduction -₹50,000
Other Deductions ₹0
Taxable Income ₹11,50,000

Total Tax Payable

₹1,27,400

✓ With Smart Tax Planning

Gross Salary ₹12,00,000
Standard Deduction -₹50,000
80C (ELSS, PPF, etc.) -₹1,50,000
80CCD (NPS) -₹50,000
80D (Health Insurance) -₹25,000
Taxable Income ₹9,25,000

Total Tax Payable

₹62,400

💰 Annual Tax Savings: ₹65,000

Over 30 years = ₹19,50,000 saved + wealth built through investments!

Your ₹2.25 lakh investments not only save tax but also grow at 10-12% annually, creating massive wealth over time.

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