Check out these last-minute tax tips

Last February, Prem Kohli, 54, a government employee, realised that he was falling short of his Section 80C obligations by Rs 25,000.

No wonder he was glad when an insurance agent offered him a unit-linked insurance policy (Ulip) with an annual premium of Rs 25,000. The agent said the policy would give him 12 per cent annually.

Later, he realised that the amount could have been used to pre-pay a part of his home loan and the benefit would have been the same. "I will be paying for this mistake for three more years. If I surrender the Ulip now, I will lose the entire money," said Kohli.

Tax planning is an annual exercise. Yet, the salaried do it in December-January when their companies seek investment details. If they do not provide the details, tax is deducted from their salary. The result: Many end up making investments they later regret. . . .

It is best to start planning at the beginning of the year. But if you are late, here are some quick-fix tips.

First, know your tax liability. Here are the basic tax slabs -- for individuals, the basic exemption is Rs 1.6 lakh (Rs 160,000). There is 10 per cent tax on income from Rs 1.6 lakh to Rs 3 lakh (Rs 300,000). Between Rs 3 lakh and Rs 5 lakh (Rs 500,000), the tax rate is 20 per cent, while income above Rs 5 lakh attracts 30 per cent tax.

For senior citizens and women, the basic exemption is Rs 2.4 lakh (Rs 240,000) and 1.9 lakh (Rs 190,000), respectively. Other slabs are similar.

Existing investments, such as contribution to the Employees' Provident Fund, repayment of housing loan and premiums for life insurance and health insurance can be used for deductions under various sections.

"For the Rs 1-lakh (Rs 100,000) deduction under Section 80C, forced deductions such as contribution to the Employees' Provident Fund as well as insurance premiums, qualify. As a result, most have to invest just Rs 40,000-50,000," said Malhar Majumder, a financial planner. . . .

Following are sections under which you can claim deductions.

Section 80C: This includes investments and expenses eligible for deduction from the total income. For most of these, the cumulative limit is Rs 1 lakh. There are many investment options -- equity-linked saving schemes, National Savings Certificate, Ulips and infrastructure bonds.

Section 80CCD: This allows an employee to deduct from the total income his contribution towards a pension scheme, subject to a cap of 10 per cent of the salary. An example is the New Pension Scheme or pension schemes for government employees run by the employer.

Section 80CCC: Under this, deduction is available for an investment in an annuity plan.

Section 80D: Premium for health insurance for spouse and children is eligible for a deduction up to Rs 15,000. Another Rs 15,000 can be deducted in case of mediclaim for parents. Health insurance bought for parents who are senior citizens is capped at Rs 20,000.

"This is one area that remains unutilised as people don't buy medical insurance. The least one can do is to go for riders on existing insurance plans and claim deduction under this Section," said Majumder. . . .

Section 24: Deduction is allowed on interest paid on borrowed capital for purchase, construction, repair, renewal or reconstruction of house property on an accrual basis.

But the interest portion of a loan is capped at Rs 1.5 lakh (Rs 150,000) a year for self-occupied homes. In case the property is given on rent, the entire interest can be deducted.

Another exception is a loan taken prior to April 1, 1999. In this case, the deduction is capped at Rs 30,000. If the property is co-owned, each of the co-owner is entitled to interest deduction of up to Rs 1.5 lakh.

Section 80E: Repayment of an education loan from a financial institution or donation to a charitable organisation is allowed as deduction.

There are other expenses that you can deduct from your salary, such as maintenance and treatment of a handicap dependent (Section 80DD), medical expenditure on blood relatives (Section 80DDB), donations (Section 80G), rent paid for a house (80GG) and house rent allowance (HRA).

"The deduction for the rent paid is available only to self-employed or salaried that do not have the HRA option," said Kuldip Kumar, executive director, tax and regulatory services, PricewaterhouseCoopers.