Readers ask: I am 35 and I am an engineer at a manufacturing company. I earn Rs 6 lakh as annual income. I invest Rs 15,000 in life insurance policies, Rs 10,000 in post office savings, Rs 5,000 in public provident fund (PPF), Rs 70,000 in mutual funds (tax planner). I have a mediclaim policies for Rs 20,000. I pay rent as well since I live in a rented house.
I want to pursue higher education at a cost of Rs 2 lakh. I have a few questions:
Query 1: Can I get tax benefit for my education?
Experts say: If you have taken an education loan from a bank, you are eligible for tax benefit of up to Rs 40,000 per financial year under Section 80C. Mere payment to fund your education would not qualify for tax exemptions.
You are also eligible to get a benefit for the rent you pay. Check with your HR/Accounts department to know the exact amount of your house rent allowance (HRA) benefit. Your HRA benefit depends on your basic salary and the city you work in.
The HRA benefit you'd get is the minimum of the following:
Query 2: Are the returns from mutual funds, PPF, taxable?
Taxation on different asset class
Query 3: What should my approach be in terms of investing?
Some basic guidelines are:
Disclaimer: The concept “I want a Plan” and contents above are the intellectual property and copyright of the author, Kartik Jhaveri. No part may be used or reproduced in any form or manner. If you choose to act upon the information contained in the above article it is at your own risk. This article is purely educative and you are strongly advised to consult an expert prior to taking any significant decision.