Nothing is certain except death and taxes, but fortunately when it comes to the latter, there is a fair bit of planning that can be done to ease the burden.
If you are among those who have already done the calculations and decided to stay with the new tax regime, which was first proposed in 2020, you may not have much to worry about. You could simply continue with your financial plan. But if you are someone who has stayed in the new tax regime without giving it any thought-Union Minister of Finance Nirmala Sitharaman made it the default tax regime from FY2024-then you need to evaluate your options well.
If you are among those who find the old tax regime more beneficial because of the deductions and benefits it offers, you still need to plan carefully to ensure that the tax planning exercise fits into your overall investment portfolio. We give a list of the most efficient tax-saving instruments, and the rationale of investing in them.
The one that fits your needs will be the best choice for you.
CHOOSE THE REGIME
The first step to tax planning is deciding which tax regime is suitable for you if you haven't already done so. You can only do this by comparing how much tax you are liable to pay under each of the tax regimes-new and old.
Despite the attractiveness of the new tax system after Budget 2023, the old regime remains beneficial for many. Says Abhishek Soni, CEO, Tax2Win, an income tax portal: "If your total eligible deductions and exemptions in the old regime are higher than the breakeven threshold of deductions, for your income level, then stick with the old regime. If the breakeven threshold is higher than your total eligible deductions and exemptions, the new regime may be more beneficial for you." To figure out what works for you, see Choosing Between Tax Regimes.
This story is from the February 2024 edition of Outlook Money.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the February 2024 edition of Outlook Money.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber? Sign In
The Future Of Credit Card Usage
Credit card usage is increasing in India, but it's prudent to manage credit wisely
Liquidity Coverage Ratio Framework
At the recent monetary policy committee meeting in April 2024, Reserve Bank of India (RBI) Governor Shaktikanta Das proposed changes in the liquidity coverage ratio (LCR) framework to successfully meet liquidity risk.
STRATEGIES TO HELP YOU STAY ABROAD AFTER STUDIES
More Indians are now going abroad for higher studies with plans to stay and work. But living costs, the lack of job opportunities and the burden of education loans could often pose a problem. Assess the opportunities and be practical before making such a decision
FROM SAVINGS TO SECURITY: HOW INDIANS ARE PREPARING FOR THEIR SUNSET YEARS
The Outlook Money - Toluna Retirement Survey conducted in December-end 2023 threw light on how Indians plan and save for retirement. A growing number of Indians now understand the necessity of retirement planning, and want to enjoy their retirement years with kith and kin
Here's How To Install A Solar Panel
It is the season of solar panel subsidy announcements. Right after the Centre launched the PM Surya Ghar Muft Bijli Yojana to offer subsidies to 10 million households to set up rooftop solar systems, the Delhi government has announced an extra capital subsidy of ₹2,000 per kilowatt (kW) to Delhi residents for rooftop solar panel installation. Both governments have caps on subsidies. Some other states, too, offer incentives on the use of solar rooftop panels.
Master Your Own Money Choices
Instead of judging others, have clarity about what you want from your money, where you want to spend it and how you want to feel about it
3 THINGS TO CHECK BEFORE YOU EXIT YOUR POLICY
If you think that the insurance policy you bought doesn't quite align with your goals, you may surrender it. But that comes at a cost. Here's why you should do the calculations
Small And Mid Cap Rally: Be Wary
You may include small- and mid-caps in your portfolio for diversification, but understand that they may not replicate last year's returns and are relatively more volatile
HOW TO MAKE SENSE OF THE GOLD RUSH?
The precious metal has been on an upward rally for the last couple of years due to factors as diverse as geopolitical conflicts, bulk buying by central banks, and hope of rate cuts, of late. The key, therefore, is to invest in gold in a staggered manner
'People Are Normal. They Are Sometimes Ignorant But They Are Not Stupid'
Meir Statman, the Glenn Klimek Professor of Finance, Leavey School of Business, Santa Clara University, California, is the second generation of behavioural finance experts who refused to label people as \"irrational\" and instead called them \"normal\". In his latest book, A Wealth of Well-Being: A Holistic Approach to Behavioral Finance, he expands the circle of finance to include life well-being and shows how they are inextricably intertwined. As part of an interview series, 'Wealth Wizards: Money Maestros in conversation with Nidhi Sinha, Editor, Outlook Money', Statman spoke about his research, and explained concepts through anecdotes that can help you take balanced decisions. Edited excerpts:
