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Tax planning is a coherent part of any financial plan. Everybody, whether salaried or a businessman, is interested in minimising the tax liability.

The Income-Tax Act allows certain deductions while calculating the taxable income. At present the maximum amount of deduction available under Section 80C under different categories of investments is Rs 1 lakh only. This has to be enhanced to Rs 5 lak h so that people who are capable of investing in National Saving Certificates, Pension Plans, Bank FDs, Public Provident Fund, Life Insurance, Employees’ Provident Fund, etc., will be able to minimise their tax liability.

Removing the cap on investment under Section 80C will stimulate the saving habit. The standard deduction, which was withdrawn some time ago, has to be restored since all the earnings, including the dearness allowance of a salaried class, are taxed.

K. V. Aravindakshan, Manager,

Kerala Minerals and Metals Ltd

More Stories on : Budget | Investments | Income Tax

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