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TwirlyDumpling
TwirlyDumpling
Infosys

How to invest and save taxes

So I am going to come in a tax slab from next month, probably will make 80k+ per month. In this case where I should invest for my future safety. As I am only male child of my parents, so it's my responsibility to earn and save so that I could bring happiness in their life.

Please guide me from your personal experience and challenges that you gone through in your past.

5mo ago
3Kviews
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BouncyPretzel
BouncyPretzel
Newfold Digital5mo

Let me break it down for your learning :

Taxable income can be reduced with the help of Exceptions and Deductions like below :

  1. Rent - HRA
  2. 80 C - PF , Mutual Fund (ELSS only which have 3 years lockin period ) , PPF etc - 1.5 lakhs can be deducted using this
  3. 80 TTA - its the interest you earn in your savings account (₹10,000 limit)
  4. Home Loan - If you have home loan can get a exception on interest given (upto ₹2.5 lakhs)
  5. 80 D - Medical premiums given by employer or your personal term or health insurance (₹25,000 can be exempted)
  6. 80 CCD(1B) - NPS national pension scheme which give a deduction of ₹50,000

If you use all this in Old Regime you will have to pay less tax compared to new regime which only cover a standard deduction of ₹50,000

But if you don’t have any such exception or deduction then new regime will suit you.

TwirlyDumpling
TwirlyDumpling
Infosys5mo

Thank you so much , this is the detailed explanation for the newbie like me

BouncyPretzel
BouncyPretzel
Newfold Digital5mo

At a young age one should focus on — Term insurance
Mutual funds investment (any equity fund) via SIP Stock Market only if you have learned and know how to analyse a business- like EPS, ROCE , ROE, PE ratio, growth , sales margin, cashflow etc.

BouncyWaffle
BouncyWaffle
Tredence5mo
  1. Investing in ELSS taxer Saver Mutual fund it has 3 years lock in period. Returns on it is completely tax free.
BouncyWaffle
BouncyWaffle
Tredence5mo

It's better to split up and invest.

30% of the amount in ELSS fund 30% Of the money you need to maintain an emergency fund for you. So my suggestion is go for an FD check out Stable money app. So remaining 40% if you still have money left. Best option is to safely invest in an Midcap Index fund.

TwirlyDumpling
TwirlyDumpling
Infosys5mo

Any idea about VPF ??? Is that also helps in reducing the tax

PrancingMuffin
PrancingMuffin
WS Atkins5mo

You can invest in Debt, Mutual funds and Precious metals. Insurance for protection ... DM if you need more details. Can help you with a reference of financial advisor.

SwirlyMochi
SwirlyMochi
Intuit5mo
  1. Rent/Term Life Insurance (1.5L)
  2. NPS (50k/yr)
  3. Home Loan (if you are planning)
  4. To grow your money, put some funds in NAV MF and stock market
TwirlyWalrus
TwirlyWalrus
Bharat Petroleum5mo

I am not completely informed but as far as I have learned, the new regime ignores all deduction claims and it is the default one unless you go for the old one specifically.

For the deductions, go for ELSS, PPF and insurance for yourself and your kid. Also, claim HRA if you live on rent.

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