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One of your clients in India, a government employee, would like to reduce his taxes ....

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Accounting

One of your clients in India, a government employee, would liketo reduce his taxes . He is trying to decide whether he shouldcontribute 50,000 to a Retirement Savings Plan this year. He haslife insurance policy to which he pays a monthly premium of8500.

a. What advice would you give to your client regardingRetirement Savings Plan contribution? Explain your conclusion.

b. What are the other alternative methods through he can planhis income and tax.

Answer & Explanation Solved by verified expert
4.3 Ratings (881 Votes)
Background In India according to the Incometax Act 1961 various investments made during the year are allowed as deduction from the Gross Total Income These are detailed in the Chapter VI A of the Incometax Act 1961 which covers all the sections among others mentioned below a Retirement Savings Plan Contributions to certain Pension Schemes Retirement Plans subject to some amount restrictions are allowed as tax savings measures Details given below Under Section 80C There are notified    See Answer
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