The Indian tax system taxes income under five heads, one of these being “salary income”. “The income taxable under the head “salary” would include salary, allowances, perquisites, profit in lieu of salary and deductions,” said Naveen Wadhwa, deputy general manager, Taxmann.com. Suppose your taxable income works out to be ₹10 lakh, post investment under Section 80C your taxable income is ₹8.5 lakh. For those with a taxable income of up to ₹2.5 lakh, the income tax is zero. “Tax planning needs to be a part of financial planning and the instruments chosen must be based on your goal,” Agarwal said.

Source: Mint January 07, 2019 03:00 UTC