Tax Saving Investment -Part I

The Finance System - Tax Saving Investment

Topics: 

Introduction

The Basics of Income Tax

Tax Saving Options

Income Tax Savings Tips

Why should you invest in Tax Saving Plans?

Introduction

As the financial year ends, salaried individuals often find themselves in a hurry to optimize their tax savings. Knowing different ways to save tax can notably trim down your tax liability while also helping you make money over time. We will explore essential tax-saving investments and strategies for salaried individuals.

The Basics of Income Tax

Before looking at ways to save on taxes, it's essential to know the basics of income tax. The money people earn is taxed according to rules set by the government. People who have jobs usually have taxes taken out as tax deducted at source (TDS) from their salaries

Tax Saving Options

a.       Traditional Tax Saving Options: Section 80C

b.      Alternative Tax Saving Investments for Salaried Individuals

Traditional Tax Saving Options: Section 80C
One common way to save on taxes is through Section 80C of the Income Tax Act. This section lets you claim deductions of up to ₹1.5 lakh each year for different investments, such as:
a. Public Provident Fund (PPF): PPF is a safe long-term investment that gives fixed returns. It is suitable for workers in all fields and allows a tax deduction of up to ₹1.5 lakh each year.

b. Employee Provident Fund (EPF): Money put into EPF can be deducted from your taxes.

c. Equity Linked Savings Scheme (ELSS): These are mutual funds that mainly invest in stocks and have a lock-in period of three years.

d. Life Insurance Premiums: Payments made for life insurance can be deducted under this section.

e. Post Office Tax Saving Schemes: Certain post office schemes qualify for tax deductions under Section 80C.

f. National Pension Scheme (NPS): NPS is a government pension plan for government workers and private sector employees. Your own contributions can be deducted from taxes up to 10% of your salary, within the ₹1.5 lakh limit. You can also get an extra deduction of up to ₹50,000 for NPS Tier I contributions. The employer’s contribution to NPS can also be deducted, capped at 14% for central government workers and 10% for others.

g. Sukanya Samriddhi Yojana (SSY): This scheme helps parents save for their daughter's education or marriage. It is a low-risk option and allows a tax deduction of up to ₹1.5 lakh each year.
While these options are traditional favorites, it’s wise to explore alternatives to diversify your investment portfolio.

Tax-Saving Investments for Salaried People

Apart from Section 80C, there are other good ways to save on taxes:

a. Home Loan Interest - If you have a home loan, you can deduct the interest paid, up to ₹2 lakh each year.

b. Fixed Deposit -A fixed deposit gives you a set return after a certain time. If the deposit is for at least five years, you can deduct up to ₹1.5 lakh from your taxes.

c. Health Insurance -Health insurance helps cover medical costs. You can get a tax deduction of up to ₹25,000 for yourself and your family (or ₹50,000 if you are 60 or older) and up to ₹25,000 (or ₹50,000 if your parents are 60 or older) for your parents.

d. National Savings Certificate- This is a government-backed savings plan. You can get a tax deduction of up to ₹1.5 lakh each year.

e. Pension Plans - Pension plans provide steady income after you retire. You can deduct up to ₹1.5 lakh from your taxes for the premiums you pay.

f. ULIP  -A Unit-Linked Insurance Plan lets you invest in funds while providing insurance. You can deduct up to ₹1.5 lakh for the premiums paid, and the money you get back is often tax-free.

g. Endowment Plans -These plans help you save for long-term goals and provide life insurance. You can deduct up to ₹1.5 lakh for the premiums paid, and the money you receive is often tax-free.

h. Term Insurance - This is a basic life insurance plan that offers financial support in case of an unfortunate event. You can deduct up to ₹1.5 lakh for the premiums, and medical insurance costs can also provide tax benefits.

i. Tax-saving Mutual Funds - These are funds that invest in stocks and are suitable for those willing to take some risks. You can deduct up to ₹1.5 lakh for your investments in these funds.

The Finance System - Tax 2025

Why should you invest in tax-saving plans?

 Investing in tax-saving plans in India can help you save money on taxes and grow your wealth for the future. These plans have two benefits: they reduce your taxes and allow you to invest the savings, giving you more financial advantages.

 Important Tips for Saving on Taxes

You can save more by using different tax-saving options together. For example, you can invest in ELSS for the long term and put money into NPS for your retirement. Also, think about paying for health insurance and using home loan deductions to reduce your taxes.

 Tax-saving investment plans help you pay less in taxes and grow your money to reach your financial goals.

Takeaway

There are many ways to save on taxes. Each way has its own pros and cons. They are designed for different people based on their age and how much risk they want to take. By investing in these options, you can save money on taxes and grow your savings for your goals.

Stay organized and keep a record of all your eligible expenses so you don’t miss any tax deductions. Use all the options available to make the most of your income.

Happy Investment on this Gudi Padwa

The Financial System - Happy Investment  

Gudi Padwa is celebrated on the first day of Chitra, which is the first day of new moon. In Maharashtra, people celebrate this  day with joy as it marks the start of new year, spring, and the harvest of rabi crops. It is also believed that Brahma created the universe on this day. Different states have different names for Gudi padwa, but it is important time for those wanting blessings for new projects or investments. 

On this day, Lord Rama returned to Ayodhya. In Maharashtra, it also honors Chhatrapati Shivaji Maharaja's  victory over Mughals.

The festival is celebrated by cleaning and decorating homes with colorful designs. People start the day by eating neem leaves and jaggery, which is thought to cleanse the body and show that we accept both good and bad experiences in life. Sweets are made and shared, and it is a good time to start new businesses, do a special prayer for homes, and buy new vehicles.

Gudi Padwa is a good time to make investment choices because it represents new beginnings and prosperity. Whether you're investing in real estate, stocks, or other areas, it's important to plan carefully. The property market is growing, especially in cities like Pune and Mumbai.

Importance of Gudi Padwa for Investments

Gudi Padwa is a special festival for Marathi and Konkani Hindus in Maharashtra. It is a time for fresh starts and hopes for good luck. This article talks about why buying gold or diamond jewelry on this important day is seen as a good idea and how it connects to cultural traditions.

The Importance of Gudi Padwa Gudi Padwa is based on the idea that starting something new on this special day will bring good luck and success. It is a great time to buy property because it signals the start of a good time in life. The happy atmosphere, along with good deals from sellers, makes this a perfect time to invest in property.

 

The Auspiciousness of Gudi Padwa

We will look into the history and meaning of Gudi Padwa, showing its links to stories from the past and why it is a sign of new beginnings and good luck. This day is seen as a great time to buy valuable items, especially gold and diamond jewelry, which are thought to bring wealth and happiness.

 

Investing during Gudi Padwa

Gudi Padwa is seen as a great time to invest, especially for people looking to buy a home. Many want to book their dream home during this month, which marks the start of the New Year. This time is believed to be good for buying property.

Gudi Padwa is celebrated with joy in Maharashtra. People come together to enjoy the festivities with prayers and happiness. Many think that buying something valuable on this day brings good luck. How about getting a two-wheeler? You can buy a bike or scooter to make your travel easier and more comfortable.

 

Why Gold & Diamond - The Best Time to Buy Gold

Talk about the best times to buy gold and how Gudi Padwa is a good time to do so based on the moon and stars. Give tips on when to buy to get the best luck during the day.

Share stories about the tradition of buying gold on Gudi Padwa, showing how different people celebrate it in various places. Emphasize the feelings and beliefs connected to buying gold on this special day.

 

Why Invest In Real Estate

Gudi Padwa is a festival in Maharashtra, India, marking the New Year in the Hindu calendar. It is a time of culture and traditions in the state. This festival is also a good time to invest in real estate. Investing during Gudi Padwa can bring good energy and new beginnings.

Gudi Padwa also celebrates the harvest season, which symbolizes growth and fresh starts. Buying a home during this time can be the start of a journey towards financial success. If you wanted to buy a home last year but couldn’t, you can make that happen this year during Gudi Padwa. It can be the best time to buy a home in great locations.

 Special Booking Deals -At this time of year, builders try to get more home buyers with special deals like low or no Stamp Duty, free appliances for quick bookings, and other help.

Gudi Padwa, the lively festival marking the start of the Maharashtrian New Year, is celebrated with joy. It represents new starts, success, and growth. People usually clean their homes, cook tasty food, and decorate with colorful rangolis and Gudis that stand for victory and happiness. Gudi Padwa is not just about traditions; it is also a great time to make big investments, especially in real estate.

Real Estate Trends During Gudi Padwa

Real estate developers often introduce new projects, ready-to-move-in homes, and good payment plans during this festive time. Property buyers can find ready-to-move-in homes with great offers.

 

Important Steps to Start Your Financial Planning This Gudi Padwa

The start of a new year is a time to think and make changes. As we say goodbye to the last year and welcome the new one, we often make plans for our finances and set goals. But sometimes, the excitement of New Year's Day fades, and we find ourselves spending money without seeing any benefits.

During Gudi Padwa, as explaned earlier  many people in India invest in gold and property, following the ways of their family. However, these traditional investments may not be as good as they used to be. Today, there are many new types of investments, like stocks, mutual funds, Sovereign Gold Bonds (SGBs), and fixed deposits, that can help your money grow.

 

While most of us know that investing and making a financial plan is a great way to start the year, many don't know how to begin. Please read SMART goal blog to start your healthy & wealthy investment

 

Takeaway

Gudi Padwa is not just about the New Year, it’s also about being smart with money. With changes in the economy and markets, it’s important to make good financial choices. Focus on careful spending, smart investing, spreading out your investments, getting insurance, and managing debt to keep your money safe and build a strong financial future.

As you raise the Gudi this year, let it show your commitment to good financial health and growing your wealth over time.

Happy and Prosperous Gudi Padwa to everyone!

Earning Tips - Personal Finance Management- 2

Earning Tips

Two main ways of Income is Offline & Online

 Offline Earning -

A person can earn money from different places, and this can be grouped into several types. There are five main types of income –

 a)                  Earning from salary

b)                  Earning From House/Office Property Rent

c)                  Earning from Business profits

d)                  Earning from Capital Gain: 

e)                  Other Sources: 

 

Earning from salary:  

Earning from salary is the money a person gets for doing work based on a job contract. This contract should be part of an employment agreement.

Earning From House/Office Property Rent: 

 A house property can be any land or building that you own, like your home, office, or business. Income from house property is the money a person makes, mostly from rent, by owning a building, apartment, shop, or land. The Income Tax Department does not treat your business differently from your home when checking your income. All properties are taxed the same way.

Earning from Business Profits

Earnings usually refer to how much money a company makes after paying all its costs. Net earnings show what a company has left after expenses. In simple terms, earnings show the total money a company makes from its business activities during a certain time

Net earnings are a way to measure a company's financial performance for a set time.

Earning from Capital Gain: 

Any money made from selling a capital asset is called Earning from capital gains.  You can use both Short-Term and Long-Term Capital Assets to make this profit. You can only earn Capital Gain if the asset you sell is a Capital Asset. If it’s not a Capital Asset, you won’t have Capital Gain. Examples include selling a house or selling stocks.

 

 Other Sources:

Money that doesn't belong to any other category will be called 'Income from Other Sources.' This includes things like gifts, interest from savings or fixed deposits, and dividends.

Online Earning -

It means money earned from things done online. This can include selling items, providing services, taking surveys, or earning money from social media.

Your phone or laptop could help you to make real money without getting up from  your couch? when you are on Instagram, watching YouTube, the internet can be a way to earn money, not just pass the time? think about making extra cash while doing something you enjoy, or turning your free time into regular income. but so many choices, where do you began? That's what this blog is for. we will show you the easiest and most trustworthy way to make money online.

 

You can make money online in India, but you need to follow some rules:  

Before you start working online for someone, check if they are real and trustworthy.

 Be careful when picking online earning apps or websites, as they can cause serious problems.
Always read their rules. Making money online through illegal activities is not allowed and can get you in trouble.

Don't get involved in online crimes like hacking, pretending to be someone else, or tricking people. 

 How to earn Money Online in India

In India, if you want to make money online, a quick Google search will show you 500+ ways to do it.  But many of these are just ads for people or companies. The blog will explain how you can earn money online.

 Some simple ways to earn money online.  

Online Web Designing Services - If you know how to use a computer, you can take an easy web design course and start your own web design business. There are guides that will help you learn. After that, you can start making money by creating nice websites for people and businesses. 
 

 
Start Blogging -Start a blog to share your love for food, fashion, or writing. This is a great way to make money online. With effort and determination, blogging can really change things for you. To begin, you need a domain name and a web hosting service. Web hosting usually costs between ₹1000 and ₹5000 per year.
 
 Freelancing - Freelancing means being your own boss. As a freelancer, you don’t have to work for just one company, so you can live anywhere with good internet. You choose when to work and who to work for. Thanks to the internet, it’s easy to find people and businesses that need your skills. You can work with clients from your country or even around the world. Sometimes, you can also work with other freelancers who are far away. Some common freelance jobs include making websites, designing graphics, and writing, developing apps, editing videos, improving website visibility, and providing virtual help.

 Online Tutoring - Online tutoring is a great way to make money from home for free. If you love teaching, you can help students learn online. You can teach your favorite subject to students all over the world. Beginners usually earn about ₹200 per hour through online tutoring. With more skills and experience, you can earn up to ₹500 per hour. You can also check out our detailed blog for more ways to earn money by teaching online.

 App Designing & Developing - A popular way to earn money is by becoming a mobile app developer or designer. In recent years, there has been a high demand for experts in Android app development and people who work for app development companies
 
Start a YouTube Channel - Do you want to be famous on YouTube and make money from it? If so, you need to be patient and work hard! A YouTube influencer makes videos to share helpful information. Uploading videos on YouTube is a simple way to earn money using your phone. If you want to share your ideas with others, you can start your own YouTube channel. Since many people create content on YouTube, you need to find a way to be different. Companies pay a lot to marketers to help promote their products. To get noticed, make interesting thumbnails, share your videos on social media, and connect with your viewers to grow your audience.

Start an Online Store - Online shopping has become very popular in recent years. If you want to show your products to people and make money, you can become an online seller. A seller on Snapdeal or Flipkart sells goods for money.  To start selling online, create a store on an e-commerce website and provide your business info, bank account details, and tax information. You can then add products and manage orders through a dashboard. When you make a sale, the money goes into your account. 
 
Become a Freelance Copywriter -Copywriting is writing short content for ads and marketing. It should be clear and to the point, sharing one or more ideas quickly. It takes a lot of thought but can pay well! If you enjoy writing and want to make money. 

Become an online Content Editor - For a usual income and you want to work from home on your desktop, laptop or on your mobile go for copy editing. it is very easy to make money from content and copy editing. if you are good in grammar & typing, you can became a Copy Editor 

Affiliate Marketing - It is a popular way to make a money online. when you promote product or service using your special link and earn money for each sale made through that link. 

Gold Prices are at their Highest point ever.

 

Gold prices are at their highest point ever.

Gold prices have gone up because of economic worries. Should Investor you buy more now or wait for the price to drop?

India people, especially women really like Gold It is the most precious metal. The price of gold changes every day in every city, including India. In Maharashtra, the price of gold is influenced by many factors, including global trends. Because of this, a lot of gold is bought all over the country, including Maharashtra. People not only buy physical gold but also trade gold as a commodity and in gold-based financial products.

No matter how the economy is doing, people in India always buy gold. If you want to invest in gold, you should know the gold prices in Maharashtra. In Indian homes, gold is seen as special and lucky. Besides its cultural importance, gold is also a good investment.  Whether you are buying gold jewelry, coins, or bars, check the gold price in Maharashtra today first. Remember, gold prices in Maharashtra change every day because of things like demand, supply, inflation, and the value of the rupee against the dollar. Gold prices can change a lot, have ups and downs, and sometimes stay the same for a while. Investors should be careful not to invest too much. Still investors are willing to pay more for gold because it has less risk.

 The Rises in Gold is Unstoppable

 

The rise in gold prices keeps going strong.  Today, gold hit new highs, and experts believe it will keep rising this year gold has done very well, increasing by almost 15%, which is better than any other type of investment. On the other hand, stock markets around the world have only seen small gains, and US markets briefly dropped before bouncing back.

 

 The rally in gold is expected to continue in the near term supported by a weaker US Dollar during the month, rising inflation expectations in the US, along with lower rates and geo-economics uncertainty.

 

And indeed, gold prices continue to be on an unstoppable upward journey. The  price per 10 grams of gold touched a fresh record high of Rs 88,288 as of March 19, 2025. This marks the 3rd consecutive monthly gain for gold.

In India, the main stock indexes, Sensex and Nifty, have fallen about 5% this year due to uncertainty from Trump's trade policies. At the same time, central banks around the world are buying a lot of gold, which is driving prices higher.

Effect of rising gold prices on gold demand

A report from the World Gold Council (WGC) says that high gold prices have lowered demand, especially for gold jewelry. Shoppers are holding off, hoping prices will drop or at least stay steady. However, demand for gold bars and coins are still strong because people are optimistic about future gold prices. 

Effect of rising gold prices on Gold ETFs

Indian gold ETFs saw money coming in during February. Although the amount was less than January's high, it was still good due to more people wanting to invest because of worries about the global economy and rising gold prices.

The Association of Mutual Funds in India (AMFI) reported that gold ETFs had net inflows of Rs 1,980 crore in February, making it the tenth month in a row with positive inflows. In January, gold ETFs had inflows of Rs 3,751 crore

 

The World Gold Council thinks that gold prices might stabilize soon because of their recent rise. Even though there may be some short-term ups and downs, the key factor for gold's future price will be whether the basics can support its overall trend. While strong prices might reduce gold jewelry demand, increase recycling, and lead to some selling for profit, the WGC believes that investment demand will stay strong because of global uncertainties, rising prices, lower interest rates, and a weaker US dollar.

 

Gold Investment wheatear it is Right or wrong?

In 2024, gold has performed very well in India, unlike local stocks that lost value. Gold has also done better than bonds and bank deposits. Central banks are buying more gold, and investors want it for safety in these uncertain times. This shows that gold is important in investment plans.

For investors who want to include gold in their portfolio and plan to invest for 7-10 years or longer, gold can still be valuable. It's recommended to allocate about 10% to 15% of your total investments to gold, preferably through Gold ETFs.

If your gold investments have gone over 10-15% because of the recent gains, it may be wise to take some profits to return to the preferred allocation.

Gold Investment in Maharashtra

 

		The Lowest Gold Prices country –  It’s hard to say which country has the cheapest gold price, but Dubai (UAE) is famous for having no tax on gold

Facts about gold:

• Gold is a special metal that does not rust or lose its shine.
• Gold is the only metal that is yellow.
• Gold is very heavy; a cubic foot of gold weighs more than 1,000 pounds.
• Pure gold melts at 1,064.43°C and boils at 2,856.1°C.

Government Policies

Government rules about gold can affect how much gold is available and how much people want to buy. These rules include taxes, import fees, and customs rules. Other things that can change gold prices are:

 

Take Away

Gold prices in India show how the country has changed over time due to money problems, outside events, and cultural practices. Before independence, prices were stable, but they changed a lot after independence to match the economy. Gold is important in India and represents both tradition and wealth for many families.

 

 

Personal Finance Management - 1st Key - Earning

 

Earning (Income)

Money is not the whole thing, but it is very vital in a person's life. Money helps us accomplish our goals and supports the things we care about most, like family, education, health care, fun and fulfilling our basic needs. This gives us freedom to use our skills, the ability to make our own choices, and financial security.  The money a person earns from their work, services, or investments, or from the business is called income. 

 

Important Points –

What is an earning/income

Definition of  an earning/income

Feature of an earning/income

Income Ways

 

What is an earning/income

Earning money is how a person gets cash to take care of themselves and their family. It is the first step in planning their finances. Earning/ Income is the money in form of salary by the individual or profit by any business.

 

Definition of Earning/Income

Income is the money a person or business gets regularly, like daily, weekly, monthly, or yearly pay for work or profits from business. Extra payments and benefits are also important. Most income is taxed unless comes under exemption.

Earning/ Income as per Income Tax Act, 1961

According to Income tax act following earning comes under taxable income

Salary

Profits and Gains from Business and Profession

Dividends

Voluntary contributions made by trusts, charitable institutions established wholly or partly for charitable or religious purposes

Perquisites

Special or Other Allowances

Capital Gains

Income from Other Sources

 

 Feature of an earning/income

            Features of earning/ Income is as given below :

The person can earn money every day, week, month, or year.

The government can apply tax when income is received or when it is earned.

The income tax law treats all income the same, whether it's earned legally or illegally.

People can earn money for a short time or a long time. Also, money received all at once or in parts will be taxed.

According to the Income Tax Act of 1961, income includes money made from work, profit from selling things, and losses.

If someone gets gifts over Rs. 50,000 in a year, those gifts are counted as income for individuals and Hindu Undivided Families (HUFs).

 

Income Ways

         Two main ways of Income is Offline & Online

Offline Income -

A person can earn money from different places, and this can be grouped into several types. There are five main types of income. –

a)   Salary income

b)   House Property Rental Income

c)   Income from Business and profession profits and gain

d)   Earning from Capital Gain

e)   Other Sources

 

Online income

It means money made from activities on the internet. This can be selling things, offering services, taking surveys, or making money from social media.

         We will see both ways of income in detail in next post.

 

Upshot

Making more money can give you more choices, but it doesn't mean you will always make good decisions. You still need to understand saving, spending, investing, and sharing. If you want to spend, save, invest, or give more, you need to earn more money. Sadly, because it's easy to get into debt, many people forget the importance of earning money.

 

 

Personal Finance Management – Important Areas

 

5 key parts of Money management are Earnings, Saving, Investing, Spending and Financial Protection.

A.     Earning

Earning is the starting point of personal finance. It is all the money you get that you can spend, invest or protect. Earning is all the cash you bring in. This includes salaries, interests, dividends, and other sources of income.

 

B.      Saving

Savings is the money you have left after paying for expenses. It's important to save money to handle big costs or unexpected events. This means not spending all your income, which can be hard to do. Everyone should try to save enough to cover three to twelve months of living expenses, helping them deal with changes in income and costs.

 

It's important to save money for unexpected expenses & emergencies.

 

Keeping too much money in a savings account isn't smart because inflation makes it worth less over time. Money not needed for emergencies or soon should be invested to maintain or grow its value through different investment options.

 

C.      Investing

Investing means buying things like stocks and bonds to make your money grow over time. When you invest, you aim to earn more money than you started with. However, there are risks since you can lose money if your investments don't do well.

 

If you're new to investing, it can seem complicated. You can learn by reading about it and studying how it works. If you prefer not to do this yourself, you can work with a financial advisor who can manage your investments for you.

 

Investing is important because it helps you build wealth to achieve your financial goals.

 

D.     Spending

Money you spend is what you pay for things you need or want. Most of your income goes to spending. This includes paying for housing, food, fun activities, home items, fixes around the house, trips, and entertainment.

 

Controlling how much you spend is key to managing your money well. You need to spend less than you earn, or you'll run out of money or end up owing others. Getting into debt can really hurt your finances, especially when credit cards charge high interest rates.

 

 

 

E.      Protection

Protection means taking steps to guard against unexpected problems like getting sick or having accidents, and keeping your money safe. This includes buying life and health insurance, and planning for retirement and what happens to your money after death.

Insurance helps make sure you and your family can manage financially when times are tough.