So we are in the summer of April and people have started filing their tax returns (I am also in the process of doing it), now as any common Indian, I too had spent considerable time talking to my CA (chartered accountant) on how I can save taxes on my earnings. So on the basis of those conversation and my investments, here are some suggestions on how to save taxes in India

1. Invest 1 Lakh in LIC so you can get rebate under IT act 80C. This I feels is must for everyone as getting Insurance is very important, specially if you have a family and you are the sole bread earner, even if you are not, I still feels you should take. If not LIC, you can go for any other plans too, many private companies and even banks are offering such plans, but always make sure you understand the terms and conditions as many such policies has locking period too

2. Always buy house taking home loan as won’t have to pay money on the interest (it do have a limit though, please check with bank and your CA)

3. Get your spouse, brother/sister as your business partner and you can ask people to pay them to their account, this is legal as long as you are not making up things, using others account to get money for you is certainly not legal. Ask your consultant if you are not sure what to do on this.

4. Never pay any one in lose cash, always pay to them by check as you can show them under office expenses, ofcourse showing wrong expenses is illegal but say if you are buying an Air Conditioner for your office, you can show it under expense provided you have paid the bill through cheque.

5. Instead of having money in fixed deposits, you can have money in mutual funds or invested in such schemes as unlike fixed deposit, you don’t have to pay taxes on the earnings of mutual funds, SIP, ULIP etc

If you know any more tips on saving taxes in India, please tell in comments.

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