The Finance Minister has brought an unanticipated change in the Indian tax structure. The tax payers all over India would be engaged in investing in to various tax saving instruments. The last budget presented, brought a change in the tax structure. The Direct Tax Code might be implemented from this April, bringing an overall change in tax pattern. All the tax saving schemes under sec 80C will become a part of new section coming under DTC.

The new tax slab structure:

Males Females Senior citizens(60-80 years) Very senior citizens(80 years & above)
Income Tax rate Income Tax rate Income Tax rate Income Tax rate
1.8 lakh Nil 1.9 lakh nil 2.5 lakh nil 5 lakh Nil
1.8-5 lakh 10% 1.9-5 lakh 10% 2.5-5 lakh 10%      -    -
5-8 lakh 20% 5-8 lakh 20% 5-8 lakh 20% 5-8 lakh 20%
Above 8 lakh 30% Above 8 lakh 30% Above 8 lakh 30% Above 8 lakh 30%

Well, proper financial planning is quite crucial. Choice of right tax saving instrument should be made on the basis of your risk return capability. Make sure that investment should be made before 31st march, 2012 to avail the tax advantage for the year 2010-2011. Here’s a list of various tax saving instruments which can help save your corpus.

1) Contribution towards Employee Provident Fund

2) Contribution towards Public Provident Fund (self and children)

3) Senior citizens saving scheme

4) Equity linked saving schemes(self)

5) Unit linked insurance plans( self, spouse, children)

6) Life insurance(self, spouse, children)

7) NSC and 5 year FD(fresh investment and interest accrued)

8 ) Pension plans

9)  Home loan(principal portion and interest portion of loan repaid)

10) School fees(up to two children)

11) Long term Infrastructure bonds

12) Health insurance( premium amount paid covering self, family and parents)

Lastly to conclude would say, just think before investing and pick the one apt for you according to your financial needs. Another important aspect which I would like to emphasize is something related to your tax saving pattern. It’s actually wise to start investing in these instruments from the beginning of the year rather than waiting for the last moment and putting your money in to any instrument which can somehow help save your tax. Besides these, investing at initial stages would help you generate attractive revenue.

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