Tax Saving Advisory

In today’s complex financial landscape, navigating through tax obligations can feel overwhelming. But with the right advisory, you can optimize your financial structure and ensure you’re not paying more than necessary. Our Tax Saving Advisory service is tailored to provide strategic insights and personalized plans that help individuals and businesses minimize their tax liabilities, all while remaining fully compliant with the law.

What is Tax Saving?

Tax saving reduces an individual’s or business’s tax burden by leveraging available exemptions, deductions, and rebates provided by the government. The primary purpose of tax saving is to help taxpayers legally lower their taxable income through smart financial planning. The aim is to align your financial goals with tax-efficient strategies, allowing you to retain more of your earnings while contributing to economic growth through structured investments.

Keeping in mind the nature of your income sources, we have curated some of the best tax-saving tips to help you maximize your savings while staying compliant with Indian tax laws. Whether you are salaried, self-employed, a business owner, or an investor, these strategies are designed to suit your financial profile.

For Salaried Individuals

1. Use Section 80C Deductions to the Fullest: Under Section 80C of the Income Tax Act, you can claim deductions up to ₹1.5 lakh by investing in specific government-approved schemes like:
   1. Employee Provident Fund (EPF): EPF is a retirement savings scheme for salaried individuals, where both the employee and employer contribute a portion of the salary each month. The employee’s contribution (up to 12% of salary) qualifies for tax deduction under Section 80C
      
      The interest earned and the amount withdrawn after a specific period are also tax-free if certain conditions are met. This helps in building a secure retirement fund while saving taxes each year.
   2. Public Provident Fund (PPF): It is a long-term government-backed savings scheme with a 15-year lock-in period, offering a fixed interest rate that is tax-free. Contributions made to PPF are eligible for deduction under Section 80C.
      
      Additionally, the interest earned and the maturity proceeds are entirely tax-free. It’s an excellent option for risk-averse investors looking for stable, long-term growth and tax savings.
   3. Equity-Linked Savings Scheme (ELSS): It is a type of mutual fund that invests primarily in equity markets and comes with a lock-in period of 3 years, the shortest among Section 80C options. Investments in ELSS qualify for tax deduction under Section 80C.
      
      While it comes with a higher risk compared to other schemes, the potential for high returns over the long term is also greater. Additionally, long-term capital gains (LTCG) up to ₹1 lakh are tax-free, making it a preferred choice for those with a higher risk tolerance.
   4. National Savings Certificate (NSC): NSC is a fixed-income government scheme with a lock-in period of 5 years, offering a fixed rate of interest. The interest earned is taxable but is reinvested for the first four years, which makes it eligible for further deductions under Section 80C. This scheme is ideal for conservative investors seeking guaranteed returns and tax benefits.
   5. Tax-Saving Fixed Deposits: These are fixed deposits offered by banks with a mandatory lock-in period of 5 years. The principal amount invested in tax-saving FDs is eligible for deduction under Section 80C. However, the interest earned is taxable. This is a good option for those who prefer low-risk investments with guaranteed returns.
2. Optimize HRA & Home Loan Benefits: Claim House Rent Allowance (HRA) or home loan interest deductions under Section 24(b), reducing taxable income.
3. Section 80D for Health Insurance: Save up to ₹25,000 for yourself and your family, and ₹50,000 if covering senior citizen parents.
4. Utilize Standard Deduction: Don't forget the flat ₹50,000 standard deduction available for salaried employees.

For Self-Employed Professionals:

1. Presumptive Taxation Scheme (Section 44ADA): Professionals such as consultants, doctors, and freelancers can declare 50% of gross receipts as profit and pay tax on that amount, saving time on complex bookkeeping.
2. Claim Business-Related Expenses: You can claim deductions on expenses such as office rent, travel, utilities, and client meetings, which reduces your net taxable income.
3. Investment in Tax-Saving Bonds: Consider Infrastructure or Government Bonds to save taxes while also securing stable returns.

For Business Owners:

1. Expense Claims: Deduct business expenses like employee salaries, travel, office supplies, and professional services to lower taxable profits.
2. Depreciation on Assets: Claim depreciation on your business assets such as vehicles, equipment, or machinery to further reduce your taxable income.
3. Tax-Efficient Business Structures: Optimize your business model with the right tax structure. For instance, sole proprietorships and LLPs can provide flexibility in taxation.
4. R&D Benefits: If your business involves research and development, take advantage of the deductions under Section 35 for R&D expenses.

For Investors & High-Income Earners:

1. Capital Gains Tax Planning: If you sell assets like real estate or stocks, reinvest profits in tax-saving bonds (Section 54EC) or another residential property to reduce capital gains tax liability.
2. Tax-Efficient Investment Options: Consider tax-free bonds, Unit Linked Insurance Plans (ULIPs) as, or National Pension Scheme (NPS) to grow wealth while benefiting from tax deductions.
3. Exemptions on Long-Term Capital Gains (LTCG): Utilize exemptions on LTCG if your investment horizon exceeds one year, particularly in equity-related investments.

For Senior Citizens:

1. Higher Tax Deductions on Health Insurance: You can claim up to ₹50,000 in deductions on health insurance premiums under Section 80D.
2. No Advance Tax Liability: Senior citizens without business income are exempt from paying advance tax, reducing administrative burdens.
3. Interest Income Deductions: Earn interest from fixed deposits, post office savings, or other schemes without paying tax on up to ₹50,000.

Why Tax saving matters?

Tax saving is crucial because:

1. It helps you manage your cash flow effectively.
2. It encourages financial discipline and long-term planning.
3. It reduces tax liability, allowing you to invest more in wealth creation.

Why Choose JKstartup360 for Tax Saving Advisory?

Our team of tax professionals brings in-depth knowledge of the latest tax laws and regulations to offer you sound advice. Whether it’s income tax, capital gains, or corporate tax, we provide customized solutions that align with your financial goals. We focus on forward-thinking strategies, including tax deductions, exemptions, and investments, to save you money in the long term. With us, you can rest assured that your tax filings and strategies are fully compliant with current tax legislation, preventing potential penalties.