Dispelling 4 Myths About Estate Planning

Some individuals wrongfully think they do not have significant assets that they can pass on to the future generations and undermine the importance of managing family wealth in india. This faulty approach apart from resulting in disputes between the person’s dependants can also lead to taxation issues. One of the most important aspects of private wealth management is estate planning. Whether you live in a modest one-bhk apartment or own multiple properties in posh locations around the country, designing and implementing an estate management plan must top your list of to-do-things. Estate planning in India is still not very popular, primarily due to the many misconceptions associated with it. To help spread awareness on the topic, the post lists some myths about estate planning and corresponding facts to penetrate the shroud of mystery engulfing it. Take a look.

1. “I’m too Young for Estate Planning”

Many people start thinking seriously about estate planning only when they reach a certain age or amass a certain amount of money in their bank account. Age, however, has very little correlation with estate planning. One thing is for sure; life is uncertain, which is why you must start estate planning at an early age and even with a lesser income.

2. “I Need Legal Help to Draft Documents” 
  

Though there is no denying the fact that drafting complex legal papers will require legal help, it is perfectly okay to adopt the DIY approach (especially if your family and financial situation is simple) to draft a simple will and power of attorney. Several sites offer templates to draft these documents. If you have a health condition, contact your hospital to get a health care directive.

3. “An Estate Plan Just Concerns Property and Belongings”

Many people wrongly believe that the scope of an estate plan is limited to managing their property and belongings. A detailed estate plan apart from covering these aspects also deals with personal matters, such as deciding the guardian of the kids in case the person dies or becomes incapacitated and is no longer in a position to care for their child. The person in their will can also mention their preferences about the type of medical treatment they intend to receive if they are unable to express their wish themselves.

4. “Estate Planning is a one time Process”

Many people wrongfully consider estate planning as a one time process and discount the importance of revisiting their estate planning strategy. Estate planning, however, is an ongoing process and changes in the person’s situation such as a death in the family, a change in their marital status (marriage or separation), birth of a child, an inheritance, or sale of business can impact their estate planning, which necessitates the need to revisiting the strategy.

Conclusion 

Estate planning helps you and your dependents get ready to face unforeseen situations. When embarking on a journey with your wealth manager to designing your customized estate management plan, stay clear of these myths to take informed, unbiased and prudent wealth management decisions.

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4 Ways to Save tax Legally for Salaried Individuals

The good thing about paying taxes is that you know the funds collected by the government will be used to finance existing and future projects in the infrastructure and health domain. However, the not so good thing about paying taxes is that it leaves you thousands of rupees poorer. That said, there is always a way out. Many taxation service providers in India offer professional consultation services to help their clients save tax by claiming deductions allowed by the government. If you are a salaried individual looking to save tax, hiring professional taxation services in India can be the way forward. Continuing the discussion, the post lists some ways in which you can save tax. Take a look.

1. Request Your Employer to Restructure Your Salary
   
   If you are spending money due to job related obligations, request your employer to restructure your salary. Some examples of such expenses are: buying a uniform, spending to entertain clients and buying and reading magazines for self development (as a part of your job responsibility). Your employer must pay for such expenses. Technically speaking, the amount you receive from the employer is not a part of your salary, which is why all such receivings are exempt. Request your employer to provide you a proof every month, which you will have to submit to claim deductions.
   
2. Invest to Reduce tax Burden
   
   Under Section 80C deductions, there are several investments that come with tax rebates. For example, you can claim deductions, if you:
   
   • Contribute to your EPF account
   • Deposit in your PPF account
   • Invest in different schemes such as: Senior Saving Schemes, National Saving Certificates and Sukanya Samriddhi Account.
    
3. Claim Deductions on Leave Travel Allowances and Medical Expenses
   
   You can claim exemption on some allowances provided by your employer to cover personal expenses such as  treatment costs. To claim exemption on this allowance, you will have to submit a copy of your medical bills. You can also claim exemption on medical expense of dependants. The amount must not exceed INR 15,000 in a financial year. Leave travel allowance provided by your employer is also tax-free, given the condition that:
   
   • You traveled when you were on leave
   • The travel destination is within India
   • You took the shortest traveling route
   • You did not travel more than two times in a block of four years. 
      
4. Claim tax Benefits on Rent Payment
   
   If you live in a rented accommodation, you can claim deductions on HRA, that can be partially or fully exempt from tax. If you live with your parents, you can pay them rent (which they must include in their return) to claim HRA exemption. To be able to claim this deduction, collect your rent receipts and compile them in a file. If your rent payment exceeds INR 1 Lakh in a financial year, you will have to submit a copy of your landlord’s PAN card and rent agreement.

Conclusion 

These are just some ways in which you can save tax. Buy health insurance for yourself or your family members to claim deductions up to INR 25,000. It is also advisable that you consult a professional tax services provider in India to learn about more deductions and design a tax saving strategy.

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