Investing in Mutual Funds for Tax Savings March 27, 2018 Posted By MCB - Arif Habib
Don’t you just hate it when a chunk of your salary disappears every month because of taxes? Wouldn’t you rather enjoy extra money to save or spend as you wished by reducing taxes?
Of course you would, and for that purpose, the calculation of the right amount taxes on your income is of immense importance. Not only that, it is also wise to take advantage of legal opportunities to save on taxes. This will help you by increasing your available funds, allowing you to accomplish your dreams faster!
Mutual Funds are the best way to save on Taxes!
Did you know that investments made in mutual funds can help you save on taxes? Not only that, the saving is instant. Under Section 62 and 63 of the Income Tax Ordinance 2001, you can reduce your total annual income tax in the same year as the investment was made, immediately.
For example: If your monthly salary is Rs. 100,000, your total tax liability for the year 2018 based on your income is Rs. 59,520. This amount will be deducted from your salary in 12 installments. Now if you want to reduce that amount, you can make an investment of any amount (maximum: Rs. 240,000) in Mutual Funds/ Voluntary Pension Schemes. Once you’ve invested, simply submit your Account Statement to your payroll department and they’ll adjust the tax savings. Meaning that for the next few months your Income Tax amount will be reduced and you’ll end up with a higher take-home salary!
The best part? Since you’ve invested in Mutual funds, the amount you’ve invested will grow. So technically, you have not only reduced your tax liability, but also taken advantage of an opportunity to generate instant savings!
How much Tax Savings can you get?
If you want to know how much you can save on taxes, you can simply find out by using our calculator which not only tells you how much of tax savings you’re eligible for, but also how much you should invest in order to gain desired amount.
How to Avail Tax Savings?
Tax Saving is actually pretty simple and can be availed in just 3 steps!
- Calculate how much you can save on taxes depending on your income. You can calculate the amount here.
- Create a mutual funds account and make your first investment. You can do that here.
- Submit your account statement to your payroll department so they can adjust it in your monthly taxable income.
What are you waiting for?
So, if you want to make your money grow and save up to 50% on taxes, simply invest in mutual funds. For more details, visit: Detax