As we approach the final month of the fiscal year 2023-24, taxpayers are diligently scrutinizing their investment documents and assessing their tax liabilities. It’s crucial to be proactive in tax planning to ensure optimal savings and avoid potential losses.
Review Your Tax Situation:
It’s imperative for taxpayers to understand their income and corresponding tax obligations. Regularly reviewing tax-saving avenues enables individuals to align their investments with their income levels effectively. Additionally, assessing the most advantageous tax regime based on individual circumstances is essential. If a taxpayer has changed jobs during the fiscal year, submission of Form 12B under Section 26A is mandatory.
Leverage Tax Saving Opportunities:
Under Section 80C of the Income Tax Act, taxpayers can avail tax benefits of up to Rs 1.5 lakh. Familiarizing oneself with investment options eligible for tax exemption under Section 80C is essential. Investments such as FDs, Post Saving Schemes, and ELSS offer tax benefits. Moreover, investing in PPF also provides tax benefits on returns.
Explore Tax-Loss Harvesting:
Tax-loss harvesting presents a lucrative opportunity to save on taxes. Long-term capital gains up to Rs 1 lakh in a financial year are tax-free, with the excess taxed at 10%. Engaging in tax-loss harvesting involves strategically selling shares up to the LTCG limit of Rs 1 lakh. This practice significantly aids in reducing tax liabilities on equity investments.
