When no one’s favourite season, i.e. tax season is around, we put all our energies to find out multiple ways to save tax. While securing your and your family’s future is one of the most used and best ways to get tax benefits, there are a number of other benefits you should know. Under section 80C, medical insurance, investments, home loan interest, tuition fees etc. are benefits which help you save on tax. These ways are known and applied by all. But, there are a few other ways which enable you to do your bit for the good of the society.
Following are the five reasons which explain why you must include donations in your financial plan:
- Distinct Options to Donate: There are different options for donations including education, elderly, differently abled, children, livelihood, environment or animals. You are never short of options when you decide to donate, all you have to do is choose and donate for the cause you believe in.
- Secured Investment Option: There are various organizations with legal validation, transparent and robust processes. The credibility of such organizations can be checked with their past records and associations. When you invest in them, you’re in secured hands. In addition, you are contributing for a great cause.
- Know your Investment Better: When you make an investment decision, it’s important to have a plan. You need to ask yourself a few questions like where you want to invest, what amount you want to invest, why you want to invest, what difference your investment will make etc. Don’t be an impulsive doner! Have your facts in place and then donate. So, you save on tax at the same time make a sane investment.
- Small Contribution, Great Impact: Monthly donations allow you to contribute without burning a large hole in your packet. You don’t need to donate a huge amount at once. But, donate as and when possible. These small donations can create a huge impact in someone’s life. It’s like investing in SIPs. Only this time you’re doing it for someone in need.
- Save Big on Tax: The most important reason due to which most investors donate is the tax benefit it offers. Yes, you can actually save money while contributing towards a great cause. As per Section 80G of Income Tax, contributions you make through donations are counted as deduction leading to tax saving.
So, above are the reasons due to which every investor should think about donation as an effective measure to save tax at the same time have a voice in social affairs. Whether it’s for tax deduction or making a meaningful move towards societal issues, thinking of donating while making your investment plan is a must.
In short, next time when it’s that time of the year and you have invested in all possible investment buckets, but still haven’t saved enough on tax, then you know what to do and how to make it count.
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