This is the last part in our four-part series where we tell you what all can be done in case you don't have sufficient surplus to invest
15-Mar-2022 •Aakar Rastogi
In the third part of the story, we discussed the best tax-saving options available for you as per your needs. Now let's continue further and see what you can do if you do not have enough investable surplus.
Don't have enough investable surplus?
Although Section 80C extends the tax benefit to certain expenses also, you should prioritise investments to fully utilise the limit. It achieves a much bigger objective than merely saving tax. These investments inculcate the habit of saving, which can make a big difference in the life of the average taxpayer. ELSS is often the first equity investment for a lot of investors. It, therefore, becomes the foundation of building a long-term equity investor.
However, if your financial circumstances don't permit you to save enough, you should claim tax exemption against permissible expenses. In the table 'Tax-saving expenses', we have summarised the most common expenses that can be claimed as deductions under Section 80C and other provisions of the Income Tax Act. If you are still left with unutilised amount, you have more tricks up your sleeve.
Claim interest received on NSC: If you have existing investments in an NSC, you can claim tax exemption on the interest for that year that got re-invested. For instance, if you invest in the NSC in March 2022 to claim deduction in FY 2021-22, you can claim deduction for the interest earned next year in FY 2022-23.
Round-trip ELSS money: If you have old ELSS investments which have completed the mandatory lock-in period of three years, you can claim deduction by redeeming and re-investing the proceeds. Of course, the re-invested amount will again get locked in for a period of three years.
Other parts of the story: