My net/total Taxable Income, after all deductions, for the Financial Year 2016-17 is Rs 4,00,000 (4 Lakh Rupees). I am a salaried person.
As per current tax brackets upto 2.5 lakh, there is NIL tax. So, my taxable income left is 400000-250000 = Rupees 1,50,000 (1.5 Lacs). This amount is taxed at 10% bracket, so now my income tax is Rs 15,000.
I have not done any extra saving. If want to open a PPF Account, then how much should I invest in PPF, so that I can save full RS 15000 tax.
I have declared in investment declaration form to my company that I will invest Rs 1.5 lac in declaration form. Does this matter?
Is it that to save just Rs 15,000 tax I have to put 10 times, 1.5 lacs in PPF account or I can just invest Rs 20000 - 30000 to save full tax.
Is their some ratio 1:2 or 1:3; i.e. to save Rs 1000 I have to invest 2 times or 3 times. Please help. I'm confused.
Thank you so much for your answer!