If you think that there is no solution for the reduced March salary due to income tax, it is time for you to think again as there are some easy ways by which you can invest wisely and save a big money.

After all, it really pays to plan in advance especially when you are almost on the verge of losing a big amount of money to taxes.

From in.finance.yahoo.com:

Points to remember

1. Section 80 C allows deduction of tuition fees spent on children’s education

2. If you want to pay rent to your parents or relatives (kindly note this arrangement cannot be done with your spouse), you will need to treat them as landlords and request the owner of the house to declare it in his/her personal income tax return

3. The maturity proceeds of life insurance policies are not taxable

4. Conveyance allowance up to maximum of Rs. 800 can be claimed per month as deduction from salary u/s 10(14)

5. Long term capital gains on listed shares/securities are not taxable

6. Capital gains on sale of house property can be avoided by purchasing another house property within two years after or one year before date of sale

7. Stamp duty charges and registration charges paid while purchasing new house is eligible for tax deduction under Section 80 C

The first step in the direction of tax saving is to assess your tax liability. So start the process so that you can then decide on what all to opt for to save maximum taxes.

Last but not the least, it is important for you plan your savings and investments according to your aspirations, your life style, your age group, size of family etc.

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