Protecting yourself is also to do with making the most of what you have. That means being savvy about tax .
Tax tends to make people nervous. But taxation management's not just for city whiz kids. This isn't about sharp practice – it's simply common sense.
There are several tax saving investment opportunities under several sections of Income Tax Act, 1961. your auditor is the right person to get them explained for you, as the tax loves do change every year.
There are three key areas where a little bit of tax nous will go a long way: savings, pensions and home .
Protect your savings
So you've started saving. But are you paying tax on your interest ? If you've got a Savings Bank account, you probably are, provided you have opted for deduction of tax at source.
Boost your pension
Here's another reason to pay into a pension: you'll may get tax relief on your contribution depending upon your other savings.
These tax reliefs are subject to certain limits.
Benefit from bricks and mortar
Owning your own home is one of the key investments you will make. And it's tax-efficient too. Check out the tax relief on both the loan amount repaid and the interest paid on your housing loan.
And finally…
Tax allowances aren't some test that you have to pass, they're for your benefit. It's up to you to make the most of them. After all, that's what they're there for.
Tax rules may change in the future.
Tax
A charge set and collected by the government. Many things may be taxable, including salaries, any income and savings (for example, interest on your Savings Bank account). Tax is expressed as a percentage.
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Interest
Credit cards, loans and bank accounts will all quote you an interest rate. This rate is expressed as a percentage and refers to the money that will be added to your savings – or to your debts – each month or year. The extra money you receive or have to repay is called interest.
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Assets
Your assets are the things you own that have value, such as your home or shares.
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Tax allowances
The government sets the
level at which you have to start paying tax – for instance,
on your salary. If you don't get to that level, you don't
pay the tax. Up to this level is known as a tax allowance.
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more terms from the glossary
Be careful – investments should stand up on their own, not because of any tax advantages.
That's right – investments should stand up on their own, not because of any tax advantages.
