Yateesh Godbole has a very tax-friendly pay structure. Only 7.3% of the income of this Pune-based engineer goes in tax.
But Taxspanner estimates that it can be reduced further by over Rs 27,000 if his company offer him the NPS benefit and he invests more in the scheme himself. If Godbole’s company offers him the NPS benefit, his tax will come down by almost Rs 11,000. Under Sec 80CCD(2d), up to 10% of basic salary put in the NPS by the employer is tax free. But if Rs 4,626 is invested in NPS on his behalf every month, his monthly takehome will reduce by roughly Rs 3,500. Another Rs 10,300 can be saved if Godbole puts Rs 50,000 in the NPS on his own under Sec 80CCD(1b).
At 32, Godbole should opt for the Aggressive Lifecycle Fund (LC-75) which puts 75% of the corpus in equity funds. Godbole and his wife have separate medical insurance plans. His parents are senior citizens but not covered by medical insurance. Godbole should opt for a family floater plan that covers all members of the family. This will work out cheaper than taking individual policies for each member. A premium of Rs 35,000 will reduce his tax by around Rs 7,000. Godbole has low exposure to equity. he should hike investments in ELSS funds form next year. Also, instead of investing at one go at the end of the year, he should start SIPs in ELSS funds.
