Income Tax Planning Simplified: Know your 80C benefit amount

VittVishesh has simplified your tax planning

Have you ever wondered how much do i really need to save tax? If you do not fall into a higher tax bracket, do you really need to block your money for tax saving instrument. What if you employ this money to some alternate saving instrument. Most of the tax saving instrument come up with a lock-in period of 3 to 15 years and beyond till your retirement age of 60. Does one really need to save the entire amount he is eligible for? What is the opportunity cost of blocking your funds in a lock in period? What are the percentages of amount which I have saved verses what I invested in 80C and NPS? What are the percentage of my tax saving amount verses there had not been any tax saving at all. If you have to start your own business next year or will be forced to borrow money for some expenses, would utilizing your tax saving instruments makes sense. If yes, then at what cost?

This excel file answers all above questions based on where you stand as far as your taxable income is concerned. Tax saving requirements for a fresher with Rupees 5 lakh annual salary will be completely different for a person with 25 lakh rupees salary. This excel file will help you in a decision support. 


VittVishesh.com will address any challenges faced while using this excel. We have simplified how much of tax you can actually save by using TAX saving instruments under section 80C and 80CCD (NPS additional contribution). Based on your taxable income you can get a fair idea in percentage that how much of your 80C+NPS investment is saving you on gross without any exemption tax amount and percentage of tax saved with amount invested in 80C+NPS. 


You need to input your gross income  and tax exempt deductions in yellow cells. If you are aware of your net taxable income, you just need to input that under gross income and leave other cells blank. You will get the simplified calculations. Tax calculation Option B provides a drop down to select percentage of 80C or NPS contribution which you intend to plan for tax saving. This simplified calculator will give descent decision support on how much of investment you should do in current financial year (2017-18). 

You can test several what-if combinations of Taxable income and tax saving amounts. 


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