We will take a quick look at all the tax planning that we can do. I will try to make this simple enough without taxing you too much!!, if you do intend to know everything from top to bottom go to Rediff->Getahead->Money
As per the new budget rule we can save upto 1,00,000 and show them for tax saving. Someone might ask, if I save 1,00,000 how much will I save on tax? For most of us the answer is 30000 in that year or 2500 per month. But truly that depends on how much you are earning per annum.(Tax Slabs).
The next question is where all can I save? You can take an LIC policy (Premiums you pay towards a Life Insurance policy), you can open a PPF account (Public Provident Fund,70000 max ) , NSS, Post Office Savings, Bonds, ELSS (Equity Linked Savings Scheme – Mutual Funds which offer tax benefits), Pension Plan (10000 max), the amount you pay towards your home loan principal, tution fees (24000 max) of your child and a few more. Please bear in mind that your contribution towards your PF account (If you didn’t know, you and your employer contribute equal amount every month to your pension account) also falls in this 1,00,000 limit.
What else? Is that all? NO. There are a few more things. Over and above the 1,00,000 limit you can save the entire amount on your home loan interest part (principal falls in the 1,00,000 limit), Medical bills (15000 max), LTA, HRA, Conveyance, etc.
Since you have so many options don’t fall prey to some intelligent agent attempting to push you to some schemes that gets his maximum benefit.