Are you facing problems while taking measures to save tax? Do you find it difficult to understand tax provisions? 

Every person looks for means to save tax. However, the measures taken do not turn out to be effective. The confusion of where to invest and how to save, takes a toll on the taxpayers. Tag along to know more.  

Tax Savings is a concept of increasing your CTC with a given income structure by taking correct measures to avail exemptions and claim deductions. 

Certain benefits of saving Taxes:  

• There is more take home income. 
• Development of emotional wellbeing and satisfaction  
• It gives exemplary morale and better mental health   
• There is wider scope to utilise money to spend and invest  
• Taxpayers are encouraged to invest in various avenues which will enhance     savings and wealth accumulation. 
• A step towards attaining financial freedom  
• This helps in planning for retirement. 
• This provides better odds to earn recurring income through investments  

Tax saving begins when there is development in the mindset to manage finances rightly. When a person takes the decision of expending wisely and utilise the savings, is said to have manage his finances with a right approach. Making a choice between a want and a need in order to develop the control in postponing the choice to spend, without compromising the required expenditure is taking the first step to avoid paying taxes. Let us understand this with an example: For example: If you have a habit of buying a luxurious meal for Rs.500 every week, and you plan to reduce this expense to Rs. 350, you may still be able to consume adequate quantity of food. The amount of Rs.150 which you save, can be invested in a SIP instead of spending it elsewhere. This investment can be made tax exempt if the SIP is opted in a tax saving mutual fund scheme. By doing a minor adjustment to your spending pattern, you not only saved some money, but also put the money in an avenue which can compound the investment and getting some tax exemptions in the process. 

This shows that taking small steps by cutting down expenses can lead to beneficial outcomes. 

Financial Planning bridges the gap of where an individual is currently and where he wants to be in future in monetary aspects. Investments are key elements to a financial plan. The nature of risk and returns are the factors that represents the value of an investment.  

Investing on a particular tax saving avenue, be it a pension scheme notified by government, specified equity mutual funds for tax savings, or any other financial savings instrument notified by the government provides the scope to save taxes in the form of deductions, and reap the benefit of income/appreciation from such an investment. As an investor, one should look for investment options that not only helps you save tax but also generate tax-free income such as investing in National Pension Scheme, Employers Provident Fund, Super Annuation Fund etc. which are allowable deductions upto Rs.1,50,000 as per Section 80 of the Income Tax Act. There are certain exemptions which can be claimed while filing tax returns. Exemptions can be availed on spendings, allowed by the government.