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The taxation laws in India contain a number of provisions to let the tax payers save on taxes. By taking some informed decisions on how you spend and account, you can save on taxes in a legitimate way. Here we discuss some important deductions under the Income Tax Act 1961. Tips to save on income tax Make the right use of Rs.1.5 lakhs limit allowed under Section 80C Investing up to a limit of Rs. 1.5 lakh in schemes like Tax-Saver FDs, PPF (Public Provident Fund), ELSS Funds, NSC (National Saving Certificate), Life Insurance Premiums, National Pension System (NPS), Home Loan Repayment, Payment of tuition fees of your children, EPF, Senior Citizens Savings Scheme, and Sukanya Samriddhi Yojana can enable you for appropriate tax deductions depending on the case. National Pension System This deduction facilitated by Section 80CCD (1B) allows up to Rs 50,000 for contributing to the National Pension Scheme. The NPS makes it possible to invest in equity and debt pension funds for building a corpus for the retirement life. This can be withdrawn at 60 years of age. Health Insurance Premiums Paying for health insurance premiums can let you qualify for a deduction up to Rs 25,000 under Section 80D. This is permitted on top of all the deductions listed above. In case of senior citizens, this limit is up to Rs. 50,000. The taxpayer contributing towards health insurance premiums for himself as well as for a senior citizen can claim a combined deduction of up to Rs. 75,000 per annum. Deduction on your rent If you are getting HRA, it is possible to claim tax deduction on your House Rent. Though there is no upper limit specified for this, there are some rules that place a cap on the maximum deduction. If you do not get HRA but pay towards rent, a maximum claim of up to Rs. 60,000 per annum is allowed under Section 80GG. Deduction on the home loan interest When you have a home loan running, the interest you pay towards the home loan is tax deductible under Section 24 of the Income tax Act. The maximum limit that you can claim in this regard is Rs. 2 lakh. If the house is rented out, there is no upper limit. Money in your savings account The easiest way to save money on income tax is to keep some money in your savings account. Up to a limit of Rs. 10,000 per year, the interest on savings accounts is tax free under the Section 80TTA. In case of senior citizens, this limit is up to Rs 50,000 applicable in cases of both FD and savings account interest. Give for charity Donations made towards charity enable you for tax deductions. Though there is no upper limit for this, there are different rules that restrict the amount deductible on the contributions towards charities. Across a majority types of donations to the NGOs, this limit is fixed at 50% of the donated amount and up to 10% of the total income that is adjusted. If you want to claim this deduction, the NGOs to which you contribute must have 80 G certificate.

How to save Income Tax in India Schemes to Invest in 2019

As we draw a close to a whole year and usher in the New Year, all of us need to do certain things to take a relook at our <keyword id="2672828" type="UNKNOWN" weightage="20" keywordseo="financial-positions">financial positions</keyword>. This helps us in taking stock of our funds, investments, loans and <keyword id="25450" type="UNKNOWN" weightage="20" keywordseo="savings">savings</keyword>. When we take stock of things, it helps us right our wrongs, and hence, plan necessary changes to better our financial planning. Following are the important aspects of our funds that we need to relook at: 
 
· Relook at retirement plans: Abhishek Gupta used to live in Mumbai. He is from Secunderabad. He inherited his father’s house in his hometown. “I had given it on rent and earning around Rs 15,000 a month. This rent used to go towards retirement planning option I had opted for. I desperately wanted to increase the contribution towards the fund. So I worked towards it, got a transfer to my hometown, gave the 1 BHK house that I owned in Mumbai on rent. It fetches me Rs 25,000 a month. So the contribution towards my retirement plan went up.” 
 
· Review your spending habits: Take a relook at where your every pie is going. Make a list of every expense you incur and make up your mind cut down on those expenses, which can be avoided. In fact you do not have to wait for the New Year. We, at Creditvidya.com, always encourage our clients to cut expenses on a month-on-month basis. 
 
· Do contribute to charity: Your contribution towards charity, philanthropy or national relief fund get exempted from tax under Section 80G on <keyword id="6354751" type="COMPANY" weightage="20" keywordseo="Income-Tax">Income Tax</keyword> Act. Not that you get to enjoy this money, at least you have the satisfaction of doing something for a social cause. 
 
· Plan something for other sources of income: It could be a tax refund or the annual dividend you earned on the shares you held or your mutual fund investment. Make sure you plough them back for better returns. If it is itching so much to spend it, may be spend a part of it, but not the whole of it. Get habituated to saving money, don’t make it an occasion. 
 
· Resolve to pay up some bit towards loan principal. It may be a car loan, home loan or a loan against property. Just decide and keep aside some bit to pay towards the principal. That way you save a lot of money on interest and work towards closing your loan account sooner. 
 
About the author: Rajiv Raj is the director and co-founder of<a href="http://www.creditvidya.com/">www.creditvidya.com</a>.

Five Important Money Moves To Make For This New Year

<div style="float: right; margin: 15px 0 20px 20px;"><table border="0" cellspacing="0" cellpadding="0"><tbody><tr><td colspan="2"><a href="http://static6.businessinsider.com/category/chart-of-the-day"> </a></td></tr><tr><td><a href="http://www.businessinsider.com/chart-of-the-day-japanese-30-year-bonds-2013-4"></a></td><td><a href="http://www.businessinsider.com/chart-corporate-cash-use-since-1998-2013-4"></a></td></tr></tbody></table></div>Recent data show that the <a href="http://www.businessinsider.com/february-personal-income-and-spending-2013-3">U.S. personal savings rate</a> has been on its way down. In other words, consumers have been <a href="http://www.businessinsider.com/february-personal-income-spending-2013-3">spending more than they have been earning</a>.
This is one of the reasons why consumer spending has held up.
Some economists warn that this is troubling and unsustainable.
But for now, it's a trend that bolstering the economy.
So, what's behind this?
"Recent data has shown continued strength in consumption, but that strength may come from how consumers "feel" from rising wealth," write the <a href="https://www2.blackrock.com/us/financial-professionals/market-insight/chart-of-the-week/breaking-the-piggy-bank">analysts at BlackRock</a>. "The strong inverse relationship between wealth and <keyword id="25450" type="UNKNOWN" weightage="60" keywordseo="savings">savings</keyword> explains the historical erosion in the savings rate."
The drivers of household wealth include rising home and stock prices.
A lot of passive investors in the stock market will soon get their first quarter statements. Many will probably be happy to see their equity allocations up around 10 percent since the beginning of the year.
Here's the chart from <a href="https://www2.blackrock.com/us/financial-professionals/market-insight/chart-of-the-week/breaking-the-piggy-bank">BlackRock</a>:
<div class="image-container click-to-enlarge" style="width:618px"><div class="image"><a title_source="BlackRock" title_caption="" class="zoomin" href="http://static2.businessinsider.com/image/5164785569beddb512000004-960/moneygame-cotd-040913.jpg"></a></div><a href="https://www2.blackrock.com/us/financial-professionals/market-insight/chart-of-the-week/breaking-the-piggy-bank">BlackRock</a></div>

CHART OF THE DAY: Why The Personal Savings Rate Is Tumbling

<ul class="summary-list"><li>Nine of 14 participants were homeless at the beginning of a San Francisco <keyword id="12730496" type="UNKNOWN" weightage="60" keywordseo="basic-income" source="Orion">basic income</keyword> program.</li><li>They were given $500 per month for six months. </li></ul>A basic-income pilot in San Francisco, California was meant to help fourteen residents attain food security and improve their overall financial well-being. What the team behind the program — called Miracle Money — didn't anticipate was that six of the nine participants who were homeless at the beginning of the program would find permanent housing by the end of it, with the support of $500 a month for 6 months. "While one recipient was able to use the funds to fully pay for their rent, $500 per month was not enough to cover full rent for all recipients," Julia Ip, Miracle Money's Evaluation Lead, told Insider. "However, it was enough to help jumpstart the house-finding process or speed it up for many." Basic-income programs like Miracle Money have been gaining popularity over the past few years across the world, especially as the pandemic <a href="https://www.businessinsider.com/capital-one-study-varying-financial-situations-of-americans-during-pandemic-2021-9">caused</a> financial strain for many low-income households. Insider <a href="https://www.businessinsider.com/how-many-ubi-guaranteed-basic-income-programs-us-cities-states-2021-12">reported</a> in December that there are at least 33 other currently or recently active basic-income programs throughout the US. Basic-income programs differ from traditional welfare programs in that they come with no strings attached: Recipients can do whatever they want with the money, and don't have to report what they use it for. Many, like Miracle Money, specifically target low-income members of groups that face increased financial hardship. California, for instance, provides funds for programs geared toward pregnant people and young adults transitioning out of the foster-care system. Another program in St. Paul, Minnesota, helps parents financially impacted by the pandemic. Miracle Money specifically seeks to help its city's homeless residents, who often face <a href="https://www.vox.com/future-perfect/2019/12/10/21001692/housing-vouchers-discrimination-racism-landlords">obstacles</a> when it comes to getting back under a roof. Additionally, San Francisco has one of the <a href="https://www.forbes.com/sites/niallmccarthy/2021/04/16/the-us-cities-with-the-highest-homeless-populations-in-2020-infographic/?sh=40cb479d188c">highest homelessness rates</a> in the United States, and a UN <a href="https://www.businessinsider.com/san-francisco-homelessness-cruel-un-human-rights-report-2018-10">report</a> from 2018 found the city government's treatment of its homeless population to be "cruel and inhuman."The team behind Miracle Money say that the no-strings-attached funding approach, as well as its "buddy program" that paired participants with volunteers for weekly calls and texts, are what helped so many of its homeless participants find permanent housing so quickly, providing both financial flexibility and emotional support. <h2>Tackling <keyword id="11931193" type="UNKNOWN" weightage="60" keywordseo="homelessness" source="Orion">homelessness</keyword> through basic income and social support</h2>Participants in the pilot mostly spent the money on food and rent, the group <a href="https://static1.squarespace.com/static/5e98c388f5b32f0d7b5e23f3/t/61cd46348e186f78e90f59e9/1640842812353/Miracle+Money+Program+Evaluation.pdf">found</a>. But people also spent money adopting service dogs supporting family members, and buying gas to drive to work and clothes to wear at the job. Some recipients were even philanthropic, one woman using some funds to buy food for neighborhood children and another donating cash back to Miracle Money. "I didn't do it for you, I did it for myself to once again feel the dignity of being able to support the causes that I believe in," the group's report quotes her as saying. Miracle Money says that part of the reason recipients were able to secure permanent housing was that the extra cash helped them leap over prohibitive obstacles <keyword id="12169802" type="UNKNOWN" weightage="60" keywordseo="homeless-people" source="Orion">homeless people</keyword> often face. One recipient stated that they previously could not qualify for senior housing because they did not have enough steady income, for instance, but was eligible because of their basic-income funds, according to Ip. Kevin Adler, the program's founder, told Insider that the "social support" aspect of the pilot was also key to giving participants a community that helped foster long-term goals such as finding permanent housing. Everyone who participated in the program worked with a volunteer for at least three months, and to get the money they had to agree to continue that relationship. Some also received support from "Smart Money" coaches through a partnership with the San Francisco Department of Homelessness, who helped participants budget and set financial goals, which also paved the way to housing. "We heard from several recipients that having a friend to talk to about how they're spending the money to reach their goals was helpful, and this in turn also deepened their friendships," Ip said.

A San Francisco basic-income experiment helped two-thirds of its homeless participants secure permanent housing in 6 months

<ul class="summary-list"><li>US personal consumption expenditures jumped 8.2% in May following a record drop in April, according <a href="https://www.bea.gov/sites/default/files/2020-06/pi0520_0.pdf">to a Friday report from the Commerce Department</a>.</li><li>Also in May, <keyword id="556222" type="PERSON" weightage="60" keywordseo="personal-income">personal income</keyword> declined 4.2%, the result of a decrease in government social benefits. </li><li>Spending in vehicles, healthcare, and restaurants drove jumps in both goods and services. </li></ul>US <keyword id="110880" type="PERSON" weightage="60" keywordseo="Consumer-spending">consumer spending</keyword> posted its biggest jump on record in May as Americans took advantage of economic reopenings to spend government stimulus checks and unemployment benefits. Still, consumption remains below pre-coronavirus levels. Personal consumption expenditures increased 8.2% in May, the most on record, according to a <a href="https://www.bea.gov/sites/default/files/2020-06/pi0520_0.pdf">Friday report from the Commerce Department</a>. The leap follows the <a href="https://www.businessinsider.com/us-consumer-spending-fell-record-april-personal-savings-jumped-coronavirus-2020-5">biggest drop ever in April</a> as consumers closed their wallets amid pandemic lockdowns. The median economist estimate was for a 9.3% jump, according to Bloomberg data. Also in May, personal income declined 4.2%, according to the report, where economists had expected a 6% slump. The drop — following a record spike in the previous month — "primarily reflected a decrease in government social benefits to persons as payments made to individuals from federal economic recovery programs in response to the COVID-19 pandemic continued, but at a lower level than in April," according to the report. The data shows a "recovery underway, but a long and uncertain way to go," said Ian Shepherdson, chief economist at Pantheon Macroeconomics, in a note. A recovery in spending is positive for the US economic recovery, as consumption makes up roughly 70% of gross domestic product. Still, the uptick in <keyword id="1754604" type="PERSON" weightage="60" keywordseo="coronavirus">coronavirus</keyword> cases in the South and West could threaten consumer spending and lead to a relapse, according to Shepherdson. And, some of the support from the $1,200 checks sent to Americans and expanded unemployment insurance will likely soon end — the additional $600 per week in benefits is set to expire at the end of July, and it's unclear if more direct checks to households will be approved. Read more: <a href="https://www.businessinsider.com/investing-strategy-stock-picks-innovators-from-fund-manager-prabha-ram-2020-6">A high-growth fund manager is tripling her peers' returns in 2020 while targeting non-tech industries like beer and restaurants. She breaks down how she picked out 5 of the most innovative companies.</a>Spending in goods and services both contributed to the $892.6 billion increase in consumer spending in May. The leading contributor to the $590.4 billion jump in goods was spending on motor vehicles and parts, recreational goods, and vehicles. The $363.8 billion increase in services spending was led by healthcare, as well as food services and accommodations. The <keyword id="9313141" type="UNKNOWN" weightage="60" keywordseo="personal-savings-rate">personal savings rate</keyword>, which surged to a record 32.2% in April, fell to 23.2% in May. The rate is <keyword id="396571" type="PERSON" weightage="60" keywordseo="personal-savings">personal savings</keyword> as a percentage of disposable income. It's still highly elevated compared to pre-pandemic levels — the rate was 8.4% in February. Wages rose 2.7% in May, the largest jump in more than two decades following a record decline in April, as businesses reopened and hired back workers. The core price index used by the Federal Reserve to gauge inflation rose 0.5% in May from a year earlier. The core price index, which excludes food and energy costs, rose 1% in the same time period.

US consumer spending spiked a record 8.2% in May as personal incomes fell

Unlike you might imagine, filing <keyword id="6374875" type="UNKNOWN" weightage="20" keywordseo="itr">ITR</keyword> is a straightforward and user friendly process. When you set out to file your ITR, here are the documents you need to keep ready by your side. Choose the right ITR form Go through the options and choose the right kind of ITR form applicable in your case. Link your Aadhaar with PAN It is compulsory for all taxpayers to link their Aadhaar with their PAN before filing the ITR. Salaried Employees Salaried employees must keep these documents ready while e-filing the income tax returns. PAN Form-16 issued by your employer Salary slips (month wise) Starting from the AY 2019-20, it is necessary to have all the information ready on the taxable allowances you have received and the amounts you have claimed except the ones towards house rent, leave travel and others. You need to disclose the same while filing. Documents pertaining to income through interests Bank statement/passbook for the interests earned on <keyword id="114757" type="PERSON" weightage="20" keywordseo="Savings-Account">savings account</keyword>. Interest <keyword id="7135061" type="UNKNOWN" weightage="20" keywordseo="Income-statement">income statement</keyword> regarding the fixed deposits. TDS certificate issued by the banks and other financial institutions. Form 26AS We can say Form 26AS is a kind of summary of the taxes deducted behalf of you and the taxes you have already paid. The Income Tax Department provides the necessary data on this. The details you will get from the IT department will show the taxes deducted behalf of you by the deductors, the details about the tax the taxpayers have deposited the tax refunds you received in a given financial year. All this information can be gathered from the IT official website. Section 80 Investments Documents related to Section 80C investments. This will include investments done under PPF, NSC, ULIPS, ELSS, and LIC which are all eligible for deductions under Section 80C. Documents needed for claiming some expenses as deductions Get ready with the following documents with you for claiming the following expenses as deductions. Contribution to Provident Fund School tuition fees of your children Life insurance premium payment Stamp-duty and registration charges Repayment of the principal on your home loan Savings schemes related to equity and mutual funds investment The maximum amount you can claim under Section 80C is Rs 1.5 lakhs. Other Investment Documents you will need The interest amount paid towards housing loan: Note that the interest amount paid towards housing loan is eligible for a tax saving up to a maximum limit of Rs 2,00,000. This is pertaining to a self-occupied home. In case of let out or deemed property, there is no upper limit on the interest amount on the housing loans that are eligible for saving tax till the FY 2016-17. Starting from FY 2017-18, the total loss from the property that is found available for setting against other kinds of income has an upper limit of Rs 2 lakhs. So, the interest on housing loan can be considered eligible for saving on taxes for an upper limit of Rs 2,00,000 even in case of property that is let out. Interest payments on education loans Statement on stock trading: the statements regarding the stock trades you accomplished in the year which will be considered under the capital gains.

Which documents are required to file income tax returns

Owning a house is a lifetime dream for many of us. And the easiest way of accelerating and fulfilling that quest is to avail a <keyword id="6354730" type="UNKNOWN" weightage="40" keywordseo="Home-loan">home loan</keyword>. However, the first step towards fulfilling this dream should be preparing a check list. It will certainly help you make the complete process easier and smoother. Here are the six essentials you should ensure while planning your home loan. 
 
Step 1: Evaluate your budget Draw a budget sheet and evaluate your income and expenses. Also consider your contingencies and <keyword id="25450" type="UNKNOWN" weightage="40" keywordseo="savings">savings</keyword> before you decide on the loan amount and, therefore, the kind of home you want. Be realistic in your approach – your loan should not end up being a burden due to unforeseen circumstances. 
 
Step 2: Check your credit report and score 
This is a rather unusual step! Many of us feel that this would be done by the lender before the organisation grants us the home loan. As your credit report and score can decide the fate of your loan application, it will be wise to check the report and score yourself before applying for a loan. 
 
Step 3: Choose your property 
Before you start looking for a lender, you should probably search for the property that suits your requirements. Check if the said property is part of any legal dispute and if the builder has a good reputation and a good track record for on-time delivery. If everything seems fine, go for it! 
 
Step 4: Ownership title Pre-plan the property ownership and also who the borrowers will be for this loan. This is important for your <keyword id="6354751" type="COMPANY" weightage="40" keywordseo="Income-Tax">income tax</keyword> planning. It also helps the lending institution quantify your eligibility when it knows your obligation towards this loan. 
 
Step 5: Choose your lender <keyword id="35660" type="UNKNOWN" weightage="40" keywordseo="features">Features</keyword> like <keyword id="37018" type="UNKNOWN" weightage="40" keywordseo="interest-rate">interest rate</keyword>, type of interest (for instance, fixed or floating), repayment option, other fees, etc., play a key role when you select a lending institution. Compare and evaluate the options available but most importantly, consider your priorities and repayment capacity before zeroing in on one of them. 
 
Step 6: Read the loan agreement 
This might be the last step, but definitely not the least! Do not be in a rush to sign it. Certain terms in the agreement may have the potential to compromise you. This makes reading the agreement extremely crucial before committing to any of its terms &amp; conditions. 
 
These simple and easy steps will help you save a lot of time and be your guide in pre-planning your home loan. Don’t forget, it is a way to realise your dreams. 
 
About the author: Satish Mehta is the founder and director of Credexpert, a credit &amp; debt counselling company. 
 
Image: Thinkstock

Pre-Plan Your Home Loan

It’s that time of the year when people run around, searching for ways to save tax. In this matter, Section 80 C of the <keyword id="6354751" type="COMPANY" weightage="20" keywordseo="Income-Tax">Income Tax</keyword> Act gets the most amount of attention from investors, as it allows tax exemption through some popular investment instruments. Premiums paid for life insurance policies, investments in <keyword id="762633" type="UNKNOWN" weightage="20" keywordseo="equity-linked-saving-schemes">Equity Linked Saving Schemes</keyword> (<keyword id="103549" type="CITY" weightage="20" keywordseo="ELSS">ELSS</keyword>), five-year fixed deposits, National Savings Certificates (NSC), Public Provident Fund (<keyword id="76579" type="CITY" weightage="20" keywordseo="PPF">PPF</keyword>) and investment in Sukanya Samriddhi Yojana are some such instruments. 
 
Among these, ELSS has the potential to beat the long-term returns from all other investment options. It also allows you to save tax up to Rs. 1.5 lakh under Section 80 C. Let’s understand what ELSS is and what are the associated benefits through this article. 
 
What is ELSS? 
Equity Linked Saving Schemes (ELSS) are open-ended mutual funds with at least 65% exposure to equity. Although there’s a high degree of risk involved in this investment, it is beaten down in the long run. The returns earned through ELSS funds have outperformed other investment instruments in the long run. 
 
According to the CRISIL - AMFI ELSS Fund Performance Index in December 2016, ELSS funds as a mutual fund category have returned 3.35% in the last year, 16.64% in three years, 17.71% in the last five and 10.61% in 10 years. 
 
The minimum investment in ELSS has to be Rs. 500, while there’s no limit on the maximum amount you can put in. ELSS comes with a lock-in period of three years and withdrawal cannot be done before the completion of the stipulated period. On completion of the stipulated period, you can either redeem your scheme or continue with it. Returns from ELSS is tax-free on completion of a year. 
 
Why is ELSS your best long-term bet? 
ELSS has proven to be beneficial in terms of saving tax and yielding returns. Following are the benefits of ELSS: 
 
• ELSS allows you to claim tax deduction of up to Rs. 1.5 Lakh under Section 80C of the Income Tax Act. The proceeds on redemption of the scheme after three years of lock-in is also completely tax free. 
 
• Compared to PPFs, NSC and fixed deposits, the lock-in period associated with ELSS is relatively shorter, indicating more liquidity. 
 
• The highest ranked ELSS funds have provided a CAGR of around 20% in the last five years – far more than options such as PPF and NSC which can provide returns in the range of 8-9%. Not just that, your ELSS returns are tax-free. 
 
• This scheme is highly affordable, as the minimum amount you can invest is only Rs. 500. If you don’t have a lump sum amount, you can even invest through Systematic Investment Plans (SIPs), depositing a small amount every month. 
 
• There is no fixed maturity period. Investors can stay invested as long as they want. 
 
• Investors earn dividends even during the lock in period and it is tax free. 
 
• The scheme forces you to stay invested at least for a period of three years without any interruptions. Moreover, if you opt for SIPs, you indulge in a more disciplined saving habit which ensures high capital growth. 
• 
ELSS and other instruments that allow exemptions under Section 80C 
 
Here is a comparative analysis of ELSS and other popular investment instruments:

Looking to save tax? Give an ELSS fund a chance – For tax savings & wealth creation

<ul class="summary-list"><li>A <keyword id="146656" type="PERSON" weightage="60" keywordseo="Chicago-Booth">Chicago Booth</keyword> Review report looks at the link between the wealthiest saving their money and <keyword id="6411412" type="UNKNOWN" weightage="60" keywordseo="inequality">inequality</keyword>.</li><li>Wealthy people's <keyword id="25450" type="ORGANIZATION" weightage="60" keywordseo="savings">savings</keyword> are used to finance household debt for everyday Americans.</li><li>As debt grows for the lowest-earning Americans, the wealthy having more savings just fuels the cycle further.</li></ul>The wealthy sitting on their savings may be helping finance the debts of poorer Americans and therefore play a role in rising inequality, according to the <a href="https://review.chicagobooth.edu/economics/2021/article/how-1-percent-s-savings-buried-middle-class-debt">Chicago Booth Review</a>. Researchers Amir Sufi, Ludwig Straub, and Atif Mian looked at the growing savings of America's wealthiest residents, and found it isn't going into what they call "productive" investments, like building roads or new research. Instead, the stockpile is going toward financing debt from everyone not in the top 1%.Prior to the financial crisis in 2008, such savings financed "almost a third of the rise in household debt owed by the bottom 90%." After the housing crash, they began to take on a greater role in subsidizing government debt (although the continued debt from lower-earning Americans is still financed from those savings).How does that work, exactly? Rebecca Stropoli at Chicago Booth Review uses the hypothetical of a corporation issuing equity to a wealthy shareholder, but the proceeds don't go on research or equipment but into a deposit at a bank, which in turn uses it to fund a mortgage for a less-affluent household. The wealthy are financing bank lending to average Americans, in other words.When the poorer take on more debt - especially when they're incentivized by low interest rates - that's less money they have to spend on other things.<h2>During the pandemic, wealthy savings climbed, along with their fortunes</h2>On the whole, the <a href="https://www.bea.gov/data/income-saving/personal-saving-rate">personal saving rate</a> - the amount that Americans have left over from their income after paying off bills - has climbed during the pandemic, although it shot down in April 2021. But, as Time's Alex Gailey <a href="https://time.com/nextadvisor/banking/savings/us-saving-rate-soaring/">reports</a>, an increased <keyword id="127121" type="PERSON" weightage="60" keywordseo="savings-rate">savings rate</keyword> may not show the whole story. Poorer Americans, Time reports, continued to spend at levels just a little below pre-pandemic rates, while their wealthier counterparts held on to more money.The wealthiest Americans saw their net worths grow during the pandemic as widespread economic devastation and unemployment ravaged the country. From March 18 to December 30, 2020, the world's billionaires added <a href="https://www.businessinsider.com/billionaires-made-39-trillion-during-the-pandemic-coronavirus-vaccines-2021-1">$3.9 trillion to their net worths</a>; that's enough to pay for the world's vaccines and to keep everyone out of poverty.In the US, billionaires got 44% richer throughout the pandemic, <a href="https://www.businessinsider.com/billionaires-in-america-got-so-much-richer-during-pandemic-2021-3">Insider's Lina Batarags reported</a>. That stands in marked contrast to the millions of Americans facing down unemployment and poverty.The researchers note that the pandemic has cleaved an even deeper divide between the <a href="https://www.businessinsider.com/top-1-americans-added-4-trillion-to-wealth-in-2020-2021-3">top 1% and the bottom 99%</a>. <a href="https://www.businessinsider.com/labor-market-low-wage-minority-workers-hardest-hit-fed-study-2021-2">Low-wage workers and workers of color</a> were disproportionately impacted by the pandemic's economic devastation, which took the shape of a K - high-earning workers saw jobs and incomes grow, while those at the bottom experienced the opposite. "Mian, Straub, and Sufi see in the data a widening wealth gap and more saving by the <keyword id="50835" type="PERSON" weightage="60" keywordseo="Rich">rich</keyword>, thus more money being turned into loans and lent out to consumers," Stropoli writes.The methods by which the <keyword id="10190939" type="UNKNOWN" weightage="60" keywordseo="ultrawealthy">ultrawealthy</keyword> hang onto that wealth have come into greater relief this week, too, as a bombshell ProPublica investigation revealed that the wealthiest Americans are paying an incredibly low rate of <keyword id="6368033" type="UNKNOWN" weightage="60" keywordseo="taxes">taxes</keyword> proportional to their wealth. That's all legal, but it could <a href="https://www.businessinsider.com/billionaires-low-taxes-propublica-could-kickstart-reform-democrats-capital-gains-2021-6">finally kickstart reform</a> targeted at America's highest earners.In the meantime, the savings of the wealthy will sit in bank accounts, fueling more debt for the rest of the country.

How the wealthy hanging onto their money actually makes everyone else poorer, according to a new study

Tax saving is a tricky subject and needs a lot of planning. By learning the intricacies in the taxation laws and studying your own situation in relation to the taxation laws will enable you save on your taxes. Here are some easy ways for the salaried employees to save on income taxes. Understand your salary slip first You must understand your salary slip well to know the ways to save on the gross tax you are liable to pay. The salary slip consists of three segments namely earnings, allowances and deductions. These sections will give enough clues on how to save on your taxes. The basic pay reflects on your earnings. Towards contributions, you might receive conveyance allowance, leave travel allowance, dearness allowance, house rent allowance and others. This section will also include deductions including income tax, professional tax and provident fund. Here are a few useful tips to plan for your taxes efficiently. How to save on taxes Income tax is levied on basic pay. Your House Rent Allowance (HRA) is tax exempted if you live in a rented house and pay the monthly rent. A fixed amount received as conveyance allowance also qualifies for tax exemption. Some employers might deduct income tax at the source. In such cases, the taxes paid already can be claimed by producing the necessary supporting documents at the end of the financial year. Also explore some options for investing in tax saving instruments. Understand Section 80C If you can understand the 80C section of the Income Tax Act thoroughly, you can hope to save on taxes and take home more salary. You are allowed to invest till an upper limit in schemes like National Savings Certificate (NSC), Equity Linked Savings Scheme (ELSS), Public Provident Fund (PPF) Bank Fixed Deposit (FD) and many other products. Do not plan for the taxes during the last minute If you will only study the tax during the last minute, it will give you very less room to save. If this happens, you will be overburdened with a need to make a sizeable investment in one time during the last minute. Small regular investments in Mutual Funds and SIPs over the entire year can help you make significant saving on taxes. Meet your financial goals through investments Investments planned in the right way not only enable you save on taxes, they also help you meet some of your cherished goals in life. It is possible to convert all your tax saving investments into ones that will bring you higher returns. For example, if you wish to buy a car, invest regularly in any ELSS. The lock in period will end in three years and after that you can withdraw this amount. Hence many tax saving instruments can help you meet your financial goals easily and effectively. Other ways to save on taxes It is possible to claim tax benefit on LTA once in every two years. To do this, you must submit the proof of travelling. Section 80D contains provisions for you to avail of tax benefits for the premiums paid towards health insurance policies. Section 80E contains provisions for tax exemptions on interest paid towards education loans.

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