Tax planning for FY 24 in India

Tax planning is the process of arranging your income and expenses in a way that minimizes your tax liability and maximizes your savings. Tax planning is not only beneficial for individuals, but also for businesses, as it can help them achieve their financial goals and optimize their cash flow.

In India, the financial year (FY) runs from April 1 to March 31 of the next year. The assessment year (AY) is the year following the FY, in which the income earned in the FY is assessed and taxed. For example, FY 24 will be from April 1, 2023 to March 31, 2024, and AY 25 will be from April 1, 2024 to March 31, 2025.

There are various tax planning strategies that can help you reduce your tax burden and save money for the future. Some of these strategies are:

- Choosing the right tax regime: The Indian government offers two tax regimes for individuals: the old regime and the new regime. The old regime al

lows you to claim various deductions and exemptions under various sections of the Income Tax Act, such as Section 80C, Section 80D, Section 80G, etc. The new regime offers lower tax rates, but does not allow you to claim any deductions or exemptions except few. You can choose either of the regimes based on your income level and tax-saving goals.

- Investing in tax-saving instruments: There are various investment options that can help you save tax under Section 80C of the Income Tax Act, such as Pu

blic Provident Fund (PPF), National Savings Certificate (NSC), Equity Linked Savings Scheme (ELSS), etc. These investments have a lock-in period of 3 to 15 years, and offer returns ranging from 6% to 15%. You can invest up to Rs. 1.5 lakh per year in these instruments and claim a deduction from your taxable income.

- Buying health insurance: Health insurance is not only a necessity, but also a tax-saving tool. You can claim a deduction of up to Rs. 25,000 per year for the premium paid for yourself, your spouse, and your dependent children under Section 80D of the Income Tax Act. If you are paying for your parents' health insurance, you can claim an additional deduction of up to Rs. 25,000 per year. If your parents

are senior citizens (above 60 years of age), you can claim up to Rs. 50,000 per year.For super senior citizens having age of more than 80 years deduction can be claimed up to 1 lacs too. In many situation even expenses on medical can be claimed.

- Donating to charity: If you are feeling generous and want to contribute to a social cause, you can also save tax by donating to eligible charitable organizations under Section 80G of the Income Tax Act. You can claim a deduction of either 50% or 100% of the donation amount, depending on the type of organization and the limit specified by the government.

- Planning for retirement: Retirement planning

is not only important for your financial security, but also for your tax savings. You can invest in various retirement schemes, such as National Pension System (NPS), Employees' Provident Fund (EPF), Voluntary Provident Fund (VPF), etc., and claim a deduction of up to Rs. 1.5 lakh per year under Section 80C of the Income Tax Act. You can also claim an additional deduction of up to Rs. 50,000 per year for investing in NPS under Section 80CCD(1B) of the Income Tax Act.

These are some of the common tax planning strategies that can help you save t

ax for FY 24 in India. However, you should always consult a tax expert before making any financial decisions, as tax laws are subject to change and vary depending on your individual circumstances.