Hello sir I m a salaried person of amount Rs. 10 lacks/ anum, what is the correct way to use of my salary with minimise the tax liability also. I am investing only LIC PPF,MF, & STOCKS ONLY & interested in property & gold. Also suggest the percentage by allocation in DIFFERENT tools with expense also.

Ans: As per the details mentioned above section 80C is completely covered.

In order to avail further benefit, you can avail medical insurance premium under section 80D. You can claim deduction upto 25,000 on premium paid towards medical insurance for self, spouse and children and parents below 60 years of age and Rs. 50,000 if parents are above 60 years of age.

You can also avail an additional deduction of 50k by investing in NPS.

Ans: You can consider a home loan. I am assuming that this house will help you save Rs 18,700 in rent. (Rs 2.24Lpa). Vs this on the Rs 40L downpayment you will lose FD interest of Rs 3.2L pre tax (FD at 7% and Equity at 15% assumed) which works out to only Rs 2.29L post tax on the FD interest. Further you would now get tax deduction on your home loan of Rs 2L pa. You would lose HRA benefit. (You need to compute this based on various HRA conditions). You tax saving on home loan is definitely going to be higher.
Thus, the home loan is beneficial to you from a tax saving basis and based on your current circumstances. However, you need to consider other factors like your repayment capacity of your EMI on home loan and also its impact on your savings into stocks, MF, etc. for the future.

Ans: presuming you have exhausted the limit of Rs. 1.50 Lacs with your existing PPF, LIC etc, you may still have room for investment u/s 80CC(1) and 80CC(2), which are central govt schemes for investment in pension schemes like Atal Pension yogana which gives additional deduction of Rs. 50 K. You can claim your bank interest in Sec. 80TTA. Claim donations, if any in 80G. in case if you have any housing loan, interest upto Rs. 2.00 Lacs is deducted from salary and net salary is offered to tax. The principle portion can be deducted from Rs. 1.50Lac slab also

Ans: To help you optimize his long-term tax savings, a well-rounded approach leveraging mutual funds (ELSS), PPF, and NPS will provide both tax efficiency and growth potential, balancing risk and security. Here’s a comprehensive strategy:

Key Investment Options:

1. Public Provident Fund (PPF):

• Tax Deduction: Up to Rs 1.5 lakh under Section 80C.
• Lock-in: 15 years, providing low-risk, government-backed returns (around 7.1%).
• Strategy: Maximize PPF contributions to Rs 1.5 lakh annually for stable, long-term, and tax-free growth.

2. National Pension System (NPS):

• Tax Deduction: Rs 1.5 lakh under Section 80C and an additional Rs 50,000 under Section 80CCD(1B).
• Equity Exposure: NPS offers flexibility in equity allocation, providing the potential for higher long-term returns.
• Strategy: Contribute Rs 50,000 for the additional tax benefit and build a retirement corpus, balancing equity and debt for moderate growth.

3. Equity-Linked Savings Scheme (ELSS):

• Tax Deduction: Up to Rs 1.5 lakh under Section 80C.
• Lock-in Period: 3 years (shortest under 80C).
• Growth Potential: Higher returns due to equity exposure.
• Strategy: Start a Systematic Investment Plan (SIP) in ELSS funds to benefit from tax savings and market-linked growth over the long term.

4. Comprehensive Plan for you:

a. Maximizing Tax Benefits:

• Contribute Rs 1.5 lakh to PPF for safe, consistent returns.
• Invest Rs 50,000 in NPS to take advantage of the additional tax deduction under Section 80CCD(1B) and build a retirement corpus.
• Allocate any remaining eligible tax-saving contributions to ELSS to optimize growth under Section 80C.

b. Diversified Investment Strategy:

• PPF: A risk-free option with guaranteed returns, perfect for long-term, low-risk growth.
• NPS: A moderate-risk option with the potential for higher returns through equity exposure, focusing on retirement planning.
• ELSS: A higher-risk, higher-reward option for long-term wealth creation and tax savings.

c. Additional Tax-Saving Measures:

• Health Insurance Premiums: Claim up to Rs 25,000 (or Rs 50,000 if covering senior citizen parents) under Section 80D.
• Home Loan Interest: Deduct up to Rs 2 lakh under Section 24(b) for home loan interest payments.

d. Tailored Recommendations:

• PPF: Max out the Rs 1.5 lakh limit to secure risk-free growth.
• NPS: Contribute Rs 50,000 annually to build a retirement corpus while enjoying additional tax benefits.
• ELSS: Invest the remainder of your Section 80C limit in ELSS to benefit from equity market growth.
• Regular Monitoring: Review and rebalance your portfolio as your financial goals evolve to ensure optimal growth and tax savings.

By following this balanced and diversified strategy, Kunal can optimize his tax savings while securing a solid financial future for his long-term goals.