No matter what your age is, if you plan correctly, you can surely save a lot of money on taxes and lower your liabilities. There are different exemptions that have been provided to us under Section 80C, which we need to make the most of. Efficient financial and tax planning is required to save your taxes and here are the different ways in which you can do so. We have discussed some important tips that people of different ages can follow to save taxes.
For people in their 20s
Most of the young people within the bracket of 20-25 years do not take tax planning seriously. But if they start early they can really save a huge amount of their wealth in the long run. At this age, it is important that youngsters invest in equity fund instruments and other essential elements of investments to get the best returns. Even though there might be a risk factor, but due to the young age, it will not become a liability. At this age, you can also get life insurance because you can get it at lower premium rates and it also brings you under Section 80C easily.
For people in their 30s
An important phase of your life when you need to plan your taxes really well or else you will be soon paying off chunky of your salary to taxes. The first thing you should do is open a Demat account and start investing. Opting to invest in retirement plans like the New Pension Scheme (NPS) and any other scheme, allows you to claim returns on your taxes. If you are planning to invest in a house, then you can choose to claim the principal repayment under 80C. Above all, don’t forget to subscribe to health and life insurance policies because they can help you save a lot of your taxes and claim good returns.
For people in their 40s
At this stage, you will be having a lot of responsibility on your shoulders and that is why you must not expose yourself to any risky investments. Continue to invest in future retirement plans, it will help to mitigate the risk. You can seek your tax benefits on the principal repayment under Section 80C, tuition fee of your children and also by contributing to PF. If you want to make investments, then do so in mutual or debt funds with the help of a good broker. Consult with them and find out the best mutual funds to invest to get good long term returns. Investing in a PPF or Public Provident Fund is also a good option that will secure you a good amount of investment after a few years.
For people in their 50s
This is the time when you will hit the peak time of your career and slowly edge towards retirement. That is why your main objective should be to secure your finances after you retire. Most of the investment-based tax-saving tools go out from the scope and options like home loan, tuition fee under Section 80C come in. If your children have opted for an education loan, then you can use it to waver taxes under Section 80E to enjoy tax returns. You can also invest in a PPF if you haven’t already.
So, these are some of the best ways in which you can save a lot of taxes at different stages of your life. Make sure to read the points carefully and effectively preserve your wealth in the long run.