Financial planning is all about the optimum utilization of the CashFlow. The first way to think about the optimization of the CashFlow is to save Tax.
Tax saving is very important, this is the only facility which salaried class is getting on their earnings, as well as this is the additional benefit for others, How ever most of the people are seen not taking care in Choosing proper tool to save tax.
In India you can save tax by the way of 80C which is up to Rs.100000/- pa & 80D which is maximum of Rs.35000/- pa.
Under 80C there are many options available , But do we really think about this options to optimize our resources ?
Think Again ............................
Can it be used as a Financial Planning tool ?
.....................
...............................
The answer is Yes !
The tax saving as well as Financial planning tool - 80C.
How ?
If you pay a life insurance premium you will get deduction. But hold I am not talking about any policy of life insurance , I am talking about Purest form of Insurance i.e. Term Insurance which can give a very strong foundation to your Financial plan i.e. Risk coverage . You can take very high amount of insurance with very less premium. Insurance is an Contingency asset which gets created immediately & then you pay for it.The remaining portion out of 100000/- can be invested in ELSS which is again a Tax saving instrument in which you can invest over a period of time to create Retirement corpus.
If you are 30 year old & going to retire at 58 you have 28 years of investment period in this period you can make 336 contributions.
Just to give you an example a 30 year old individual can get 1cr. life cover as well as can accumulate more than 2cr as retirement fund by utilizing 100000/- per year for 28 years very easily.
Think about it
We will take 80D in next Post .
Tax saving is very important, this is the only facility which salaried class is getting on their earnings, as well as this is the additional benefit for others, How ever most of the people are seen not taking care in Choosing proper tool to save tax.
In India you can save tax by the way of 80C which is up to Rs.100000/- pa & 80D which is maximum of Rs.35000/- pa.
Think Again ............................
Can it be used as a Financial Planning tool ?
.....................
...............................
The answer is Yes !
The tax saving as well as Financial planning tool - 80C.
How ?
If you pay a life insurance premium you will get deduction. But hold I am not talking about any policy of life insurance , I am talking about Purest form of Insurance i.e. Term Insurance which can give a very strong foundation to your Financial plan i.e. Risk coverage . You can take very high amount of insurance with very less premium. Insurance is an Contingency asset which gets created immediately & then you pay for it.The remaining portion out of 100000/- can be invested in ELSS which is again a Tax saving instrument in which you can invest over a period of time to create Retirement corpus.
If you are 30 year old & going to retire at 58 you have 28 years of investment period in this period you can make 336 contributions.
Just to give you an example a 30 year old individual can get 1cr. life cover as well as can accumulate more than 2cr as retirement fund by utilizing 100000/- per year for 28 years very easily.
Think about it
We will take 80D in next Post .
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