I’m 25, single, and earn about Rs 5.50 lakh each year. I haven’t made any funding for tax saving until now, aside from the Rs 2,500 that will get deposited in my Staff’ Provident Fund (EPF) account. Please advise how can I save tax by investing in mutual fund or by taking medical health insurance coverage for my mother and father? I should not have every other revenue.
Reply: I’ve presumed that the Rs. 5.50 lakh you earn is your taxable wage. After Customary Deduction of Rs. 50,000, and one other Rs. 30,000 in your PF contribution below Part 80C of the Earnings-tax Act, 1961, the taxable comes beneath Rs. 5 lakh, thus making you eligible for tax rebate as much as Rs 12,500 out there below Part 87A.
So, you should not have any tax legal responsibility, as it’s beneath the quantity of rebate out there. In that respect you should not have to make any investments for saving any tax.
That mentioned, I might advise you to purchase medical health insurance for your self, in addition to in your mother and father. It will care for any future hospitalisation bills, if wanted, as the price of medical therapies are very excessive and might upset your different budgets.
Since you’re prepared to spare some cash for funding, I might advise you to start out investing in both Sensex or Nifty Index Fund via systematic funding plans (SIPs). As you’re simply 25 and have the power to take threat, you may make investments solely in fairness in the meanwhile, as your PF contribution will care for the debt portion to make sure that there may be some asset allocation in your funding technique.
As soon as you’re now not eligible for rebate below Part 87A, you can begin investing in equity-linked financial savings scheme (ELSS) via SIP to save lots of tax.
My mom is a retired senior citizen. She has a medical health insurance coverage. We heard of revenue tax exemption for preventive well being check-up for as much as Rs. 5,000. How can we declare this? Is it out there for individuals who pay medical health insurance premium? Underneath which part is that this exemption out there?
Reply: Underneath Part 80D of the Earnings-tax Act, 1961, each particular person is entitled to assert deduction of Rs. 25,000 in respect of insurance coverage premium paid for purchasing medical health insurance coverage for his/her household, which incorporates self, partner and dependent kids.
An additional deduction of the identical quantity is offered in respect of medical health insurance premium paid for folks. Deduction in respect of fogeys might be made whether or not they’re financially depending on you or not.
The quantity of deduction goes to Rs. 50,000, if the cost is made for a senior citizen. Inside this total restrict of Rs. 25,000 and/or Rs. 50,000, one can declare deduction of as much as Rs. 5,000 for quantity spent on preventive well being check-up of the eligible class. This deduction is offered to you whether or not you’ve a medical health insurance coverage or not.
Your mom can declare as much as Rs. 5,000 throughout the eligible deduction of Rs. 50,000 offered she has really paid the identical for her preventive well being check-up.
Please be aware that the deduction for medical health insurance can solely be claimed if the cost for medical health insurance premium has been made by means aside from money. Nonetheless, in case of preventive well being check-up, this deduction might be claimed even when the cost is made in money.
The writer is a tax and funding skilled
(Disclaimer: Views expressed are the writer’s personal, and Outlook Cash doesn’t essentially subscribe to them. Outlook Cash shall not be accountable for any harm triggered to any particular person/organisation instantly or not directly.)