Page 102 - mutual-fund-insight - Mar 2021_Neat

The equilibrium points stay with the old tax structure.
Otherwise, the new one’s for you.
If you claim the deductions mentioned across
various incomes, your tax outgo in the old and
new tax systems will be the same. To save tax Sections 80C and 80D
in the old system, go beyond your equilibrium If you decide to stay with the old tax
point. slabs, you will need to make various
tax-saving investments. Once you have
6.00 lakh 50,000
ascertained your tax liability, you can
6.50 lakh 75,000
avail of the tax deductions and exemp-
7.00 lakh 1,00,000 tions under Sections 80C and 80D of the
7.50 lakh 1,25,000 Income Tax Act.
Under Section 80C, you can save tax
8.00 lakh 1,37,500
on a maximum of `1.5 lakh. There are
8.50 lakh 1,50,000
a host of avenues under this section,
9.00 lakh 1,62,500 including life insurance, tax-saving
9.50 lakh 1,75,000 funds, NPS, PPF, EPF, tax-saving FDs,
10.00 lakh 1,87,500 etc. You can find many of them in the
previous section ‘Compendium of your
10.50 lakh 1,87,500
investment choices’. Do note that under
11.00 lakh 1,87,500
Section 80 CCD(1B), you can save tax on
11.50 lakh 1,87,500 an additional `50,000 (over and above
12.00 lakh 1,91,667 `1.5 lakh) by investing in the NPS.
Among 80C investment avenues,
12.50 lakh 2,08,333
tax-saving funds (also called equi-
13.00 lakh 2,16,667
ty-linked savings scheme, ELSS) stand
13.50 lakh 2,25,000 out. They invest in equity and can be
14.00 lakh 2,33,333 most rewarding if held for the long run.
14.50 lakh 2,41,667 Also, they are transparent and have the
shortest lock-in period of three years
15 to 50 lakh 2,50,000
among 80C investment options. The
All numbers in `. Equilibrium points include the standard deduction table ‘Top 10 tax-saving funds’ lists some
of `50,000.
10-year return toppers.
If you plan to buy life insurance,
Top 10 tax-saving funds by which comes under Section 80C, it’s
advisable to go for pure term plans
10-year trailing returns rather than ULIPs or endowment poli-
cies. ULIPs and other traditional insur-
Returns (% pa)
ance combine both insurance and
Schme name 5 yrs 10 yrs investment but provide neither ade-
Axis Long Term Equity 13.64 16.77 quately. On the other hand, term plans
Invesco India Tax Plan 13.43 14.16 get you a large cover at a nominal cost.
BNP Paribas Long Term Equity 11.69 13.63 COVID-19 has made us realise the
DSP Tax Saver 14.12 13.59 importance of health insurance. Under
Tata India Tax Savings 12.77 13.36 Section 80D, you can claim tax exemp-
Canara Robeco Equity Tax Saver 15.16 13.21 tions for health-insurance premiums for
yourself, spouse and dependent children
IDFC Tax Advantage (ELSS) 12.72 13.01
for up to `25,000 (`50,000 if the policy
Principal Tax Savings 13.45 12.65
includes senior citizens). You can also
BOI AXA Tax Advantage 15.09 12.61
buy health insurance for your parents
Aditya Birla Sun Life Tax Relief 96 11.74 12.53 and get a deduction of another `25,000
Data for regular plans as on January 31, 2021 (`50,000 in case of senior citizens).

10 BUDGET & YOU

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