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If you are among those who rush to buy tax-saving products at random just before the close of the financial year without any long-term planning, you may be hurting your long-term financial health.

f you are among those who rush to buy tax-saving products at random just before the close of the financial year without any long-term planning, you may be hurting your long-term financial health. Tax planning should not be done in isolation. You must align the larger investment plan with tax-saving instruments to maximise returns. Though this should be done at the start of the financial year, it is still not too late.

Tax planning is all about Section 80C of the Income-tax Act for most of us, which includes investment tools like Public Provident Fund, National Savings Certificates, tax planning mutual fund schemes, and so on. But what taxpayers don't account for is that the employees' contribution to Provident Fund, children's school tuition fees and the principal repayment of housing loans also qualify for tax deduction under Section 80C, which is capped at R1 lakh. If you invest anything over and above R1 lakh in ELSS, life insurance, PPF or NSC, it does not give you any extra tax benefit. It is just that your money gets locked in for a certain period, which can range from three to 15 years in the above-mentioned products. The philosophy of healthy investment has two essential elements: Returns and associated tax savings.

Contrary to popular belief, Section 80C is not the only section that salaried people can exploit to save maximum tax. You have to understand the nature of each tax break; and depending on the shortfall, the remaining amount should be invested in tax-saving instruments.

There are a host of tax-saving options available to individuals, inter-alia, including the following:

* You can claim deduction up to Rs 30,000 on interest paid on a loan taken for renovation of an existing property;

* Individuals with a gross total income of up to Rs10 lakh can invest up to Rs 50,000 and claim 50% deduction on the amount invested under Section 80CCG under the newly introduced Rajiv Gandhi Equity Scheme.

* Similarly, you can claim deduction of up to Rs 5,000 on expenses incurred on health check-ups, subject to the overall limit in Section 80D, under which eduction for medical insurance is available from Rs 15,000 to Rs 35,000 subject to conditions.

* Deduction up to Rs 10,000 is available for interest income on deposits in savings account (not time deposits) with a bank under Section 80TTA.

* Donation made to certain funds or charitable institutions are eligible for deduction up to 100% or 50% as provided under Section 80G.

* Finally, under Section 24 the amount of interest you pay on home loan can also be claimed as deduction subject to the limit of Rs 1.5 lakh. This is outside the deduction available for principal repayment on the loan available under Section 80C.

Remember, these are general avenues available for tax planning. That apart, benefit of certain specific tax deductions may be claimed on a case-to- case basis.

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Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

1. ICICI Prudential Tax Plan Invest Online
2. HDFC TaxSaver Invest Online
3. DSP BlackRock Tax Saver Fund Invest Online
4. Reliance Tax Saver (ELSS) Fund Invest Online
5. Birla Sun Life Tax Relief ‘96 Invest Online
6. IDFC Tax Advantage (ELSS) Fund Invest Online
7. SBI Magnum Tax Gain Scheme 1993 Invest Online
8. Sundaram Tax Saver Invest Online
9. Edelweiss ELSS Invest Online

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Best Performing Mutual Funds

1. Largecap Funds Invest Online
1. DSP BlackRock Top 100 Fund
2. ICICI Prudential Focused Blue Chip Fund
3. Birla Sun Life Front Line Equity Fund
2. Large and Midcap Funds Invest Online

1. ICICI Prudential Dynamic Plan
2. HDFC Top 200 Fund
3. UTI Dividend Yield Fund
2. Mid and SmallCap Funds Invest Online

1. Reliance Equity Opportunities Fund
2. DSP BlackRock Small & Midcap Fund
3. Sundaram Select Midcap
4. IDFC Premier Equity Fund
3. Small and MicroCap Funds Invest Online

1. DSP BlackRock MicroCap Fund
4. Sector Funds Invest Online

1. Reliance Banking Fund
2. Reliance Banking Fund
5. Tax Saver MutualFunds Invest Online
1. ICICI Prudential Tax Plan
2. HDFC Taxsaver
3. DSP BlackRock Tax Saver Fund
4. Reliance Tax Saver (ELSS) Fund
6. Gold Mutual Funds Invest Online

1. Relaince Gold Savings Fund
2. ICICI Prudential Regular Gold Savings Fund
3. HDFC Gold Fund