15 Best Tax Saving Options under Section 80C

What so ever we earn, even then if our income is taxable we don’t want to pay tax on that income. We have a soft corner for our income. In this way, we tend to avoid paying taxes. We must remember that paying taxes on time signifies that you are a good citizen of your country.

As we all know the Government of India knows that we work so hard to earn this income. So in order to save more money from being taxed, the Income-tax Act 1961 section 80C allows a certain deduction to lower tax liability against taxable income.

tax benefits of 80c

Who all can claim deductions under section 80C?

An individual and HUF (Hindu undivided family) can claim all deductions under section 80C.

Most of the people are concerned about taxes, especially newly joined employees. Everyone wants to know about the deductions under various sections so that they can invest their hard earned money and save tax. To help you understand more, I have listed down what all tax savings investments come under section 80C of Income Tax Act 1961.

Tax saving investments U/S 80C

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Options #1 – Equity Linked Savings Scheme (ELSS) Options #2 – 5 yr Tax Saving Fixed Deposits
Options #3 – Public Provident Fund(PPF) Options #4 – Sukanya Samriddhi Yojana
Options #5 – Life Insurance Premium Options #6 – National Savings Certificate(NSC)
Options #7 – Infrastructure Bonds Options #8 – Tuition Fees
Options #9 – Senior Citizen Saving Schemes(SCSS) Options #10 – Home Loan Payment
Options #11 – Registration expenses of House and Stamp duty Options #12 – Post Office Time Deposits
Options #13 – Unit Linked Insurance Plan(ULIPs) Options #14 – National Pension System(NPS)
Options #15 – Employees Provident Fund(EPF)

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If you are in a rush and you want to cover all the points. So, we have attached a crisp video for you below.

Options #1 – Equity Linked Savings Scheme (ELSS)

ELSSs are equity mutual fund schemes that invest in stocks. They have a mandatory lock-in period of three years. They are riskier than other options like Public Provident Fund, National Saving Certificate, etc. However, they also have the potential to offer superior returns. ELSS category has offered an average return of 18.45 percent in the last five years. Investments in ELSSs qualify for tax deduction under Section 80C of the Income Tax Act. The maximum tax deduction allowed under Section 80C is Rs 1.5 lakh.

Options #2 – 5 yr Tax Saving Fixed Deposits

Tax saving fixed deposit (FD) is a type of fixed deposit, which comes under section 80C of the Indian Income Tax Act, 1961. This kind of deposit is offered for a lock-in period of 5 years. The maximum deduction an investor can claim through it is Rs 1.5 lakh. FD gives us 100% security of capital + guaranteed return on invested amount.

The rate of interest offered by banks ranges from 7 to 9% (may vary from banks to banks). The deduction is available to individuals, members of the Hindu undivided family (HUF), senior citizens and NRIs. As it is a lock-in fund, premature withdrawal is not allowed. This deposit account can be opened as single or joint holding mode. However, in case of a joint account, the tax benefit will be availed by the first holder of the deposit.

Options #3 – Public Provident Fund(PPF)

PPF is a long-term investment option of 15 years by the Government of India with an attractive interest rate of 8%(with returns fully exempted from Tax). One can invest minimum Rs. 500 to a maximum of Rs. 1,50,000 in one financial year. Deposits can be done in a maximum of 12 transactions only. One can also enjoy loans, withdrawals, and extension of the account. Loans can be taken against the Public Provident Fund between 3rd to the 6th financial year. A partial withdrawal facility can be taken from the 7th financial year onwards. The account can be extended for a period of 5 years after maturity but in a block-in mode.

Options #4 – Sukanya Samriddhi Yojana

This scheme is one of the most popular schemes by the Government of India. The aim of this scheme is to give a better future to the girl child in terms of education and marriage expenses. This scheme was launched in 2015 as a part of the Beti Bachao and Beti Padhao campaign. Parents or guardians can open the account anytime in the name of a girl child between the birth of a girl child till she attains the age of 10 years.

Up to 50% of the deposit amount can be prematurely withdrawn once the girl reaches the age of 18 years. The interest rate on Sukanya Samriddhi Yojana is 8.1%. The investment amount is limited to a maximum of Rs.1,50,000 in a financial year. Investment, withdrawals & maturity amount are tax-free. The maturity of this account is after 21 years.

Options #5 – Life Insurance Premium

The life insurance premium is a payment made to secure our life. It is paid in the name of the taxpayer or the taxpayer’s wife and children. It is an eligible tax-saving payment under Section 80C. The deduction is valid only if the premium is less than 10% of the sum assured. One can get deductions up to 1.5lakhs a year.

Options #6 – National Savings Certificate(NSC)

NSC is a savings bond that encourages subscribers (mainly small to mid-income investors) to invest while saving on income tax. This investment is mainly a savings scheme for resident individuals only. Hence, Hindu Undivided Family (HUF), Trusts and NRIs cannot invest in this scheme. Indian individuals can buy it from the nearest post office in an individuals name (for a minor) or with another adult( as a joint account). This investment comes with 2 fixed maturity periods – 5 years and 10 years.

The minimum investment amount is Rs 100 with no maximum limit. Investments of up to Rs 1.5 lakhs in this scheme are allowed as a deduction under Section 80C of the Income Tax Act. The interest rate is fixed which 7.6% to 8.5% annually is currently. Many investors take loans on this certificate from the banks. The NSC can be transferred from one individual to another if the certificate holder intends to transfer.

National Saving Certificate

Options #7 – Infrastructure Bonds

A bond is an instrument to borrow money. Basically, they are borrowings that are to be invested in government-funded infrastructure projects within a country. They are issued by governments or government authorized Infrastructure companies or Non- Banking Financial Companies. Infrastructure bonds are not available all the time.

Whenever the government needs some money then they issue these bonds to raise money from the common people. An Indian resident(not minor) and HUF can invest in this bond with a maturity period of 10-15 years with an option of buy-back after a lock-in of 5 years.

These bonds are listed on Bombay Stock Exchange(BSE) and National Stock Exchange(NSE).Investments up to Rs. 20000 are eligible for income tax deduction under Section 80CCF of the Income Tax Act(this is over 1.5 lakhs of deduction available under section 80C).

Options #8 – Tuition Fees

Under section 80C, the government of India allows tax exemption on the tuition fees paid by the individual for their children. To be more precise the deduction is available only on the tuition fees part of the total fees paid. Other components of fees such as development fees, transport fees are not eligible for deduction u/s 80C. The deduction can be claimed for only 2 children.

For e.g, If a person has 4 children and father is the only earning member in the family whose income is taxable then he can claim an exemption for only 2 children and not 4 children. But if both the parents are working and both of there income is taxable then they both can claim and get an exemption for all the 4 children. Adopted Children’s school fees are also eligible for deduction.

Options #9 – Senior Citizen Saving Schemes(SCSS)

SCSS is a savings scheme for a senior citizen who falls under the age group of 60 years and above. Those senior citizens who are at the age of 55 years or more but less than 60 years (who have retired on superannuation or under VRS) can also avail of this scheme, within one month of receipt of retirement benefits and the amount should not exceed the number of retirement benefits.

The senior citizen can visit the nearest post office to avail of this scheme. A joint account can be opened with a spouse or husband only( with the first depositor as the investor). The account can be transferred from one post office to another.

There can be only one deposit in the account in multiple of INR.1000/- maximum not exceeding Rs 15 lakh. The current interest rate is 8.7% per annum. Maturity period is for 5 years. After maturity, the account can be extended for three years more (by giving an application in the prescribed format).

In such cases, the account can be closed at any time after the expiry of one year of extension without any deduction. TDS is deducted at source on interest if the interest amount is more than INR 10,000/- p.a. Nomination facility is available at the time of opening the account and also after opening the account.

Options #10 – Home Loan Payment

One can claim deductions on principal repayment for the home loan. The exemption is available up to Rs. 1,50,000 within the overall limit of section 80C.
Conditions for claiming the deduction are as follows-

  • The home loan must be for the purchase or construction of a new house property.
  • The property must not be sold in five years from the time one takes possession

Options #11 – Registration expenses of House and Stamp duty

Registration expenses of house and Stamp Duty charges and other expenses related directly to the transfer of house are also allowed as a deduction under Section 80C, subject to a maximum deduction amount of Rs. 1.5 lakhs. One should claim these expenses in the same year one makes the payment on them.

Options #12 – Post Office Time Deposits

The post office time deposit is a post office scheme. An individual and minor(for 10 years and above) can open an account here. Minor after attaining majority has to apply for conversion of the account in his/her name. A joint account can be opened by two adults. A single account can be transferred into joint and vice-versa. Nomination facility is available at the time of opening and also after the opening of an account.

The account can be transferred from one post office to another. The Interest is payable annually but calculated quarterly. One can make a minimum investment of Rs 200 with no maximum limit. The investment under 5 Years Time Deposit qualifies for the benefit of Section 80C of the Income Tax Act, 1961.
The interest rates increase year after year –

  • 1 year A/c is 6.9%
  • 2 year A/c is 7%
  • 3 year A/c is 7.2%
  • 4 year A/c is 7.8% (interest rates as on 01.10.2018)

Options #13 – Unit Linked Insurance Plan(ULIPs)

ULIPs stands for Unit-Linked Insurance Plans. It is a combination of insurance and investment. Here policyholder pays a premium monthly or annually. In this plan, a small amount of the premium goes to secure life insurance and rest of the money is invested just like a mutual fund does. ULIP offers investors to invest in equity and debt. Life insurance ULIP must be kept in force for 2 years to claim deduction u/s 80C.

Options #14 – National Pension System(NPS)

The NPS is a pension scheme by the Indian Government which allows the unorganized sector and working professionals to have a pension after retirement. This can be opened by any Indian citizen aged between 18 and 60. No limit on maximum contribution.

The interest rate varies between 12% – 14%. Partly withdrawals are allowed only after 15 years but under special conditions. Investments of up to Rs. 50,000 can be used to avail tax deductions under Section 80CCD. This limit of 80CCD is deductible over and above the maximum limit of section 80C (Rs.1.5lacs).

Options #15 – Employees Provident Fund(EPF)

EPF is a retirement scheme which is available to all salaried employees. 12% of basic salary + DA, is deducted by an employer and deposited in the EPF or other recognized provident funds. Any employee with a basic salary of 15000 per month can open the EPF account.

The interest rate payable is 8.55%. The basic requirement of this scheme is that both the employer and employee will have to contribute a minimum of 12% basic pay+D.A. The entire PF balance with interest is tax-free if it is withdrawn after 5 years of continuous service.

Case Study – Radha recently started working in an organization. She wanted to have a better life after retirement. So she decided to save more for her future and requested her employer to deduct more 8% from her basic pay in terms of EPF. So all together Radha invested 20 % of her basic pay every month for her better and secure future in EPF. This phenomena of voluntarily investing more in EPF is called VPF (Voluntary Provident Fund).

CONCLUSION :

So, by now you all have come to know the various options to save your hard-earned money from getting taxed. Rather than just sticking to one option, don’t you think you should invest a little-little in few options so that you can get good interest rates and lump sum amount after maturity.

Please let us know your views about this article. If you have any doubts or query, leave in the comment section.

8 Benefits of filing ITR, even when income is below exemption limit

Have you filed your income tax return?

Yes /No?

There are many investors who have very low or zero tax liability and therefore they skip filing their income tax return. Then, there are investors who do not file their returns for years and only when something urgent comes up which requires their last few years of ITR, they go to a CA and file their old tax returns.

what are the 8 benefits of filling ITR?

Today, I will share with you why you should file your income tax return, even if you have income below the taxable limit.

Before that, let me share with you what exactly is ITR, for those who are not aware of it.

What is Income Tax Return (ITR) and who should file it?

An Income Tax Return is a form, where a taxpayer discloses details of his/her income, claims applicable deductions and exemptions and taxes that are payable on the taxable income.

As a responsible citizen of India, everyone who has an income should file an ITR, because in this way we are actually declaring all sources of income whether taxable or non-taxable.

The Income Tax Department mandates everyone to file an income tax return if one’s gross total income (before allowing deductions under section 80C to 80U) exceeds Rs. 250,000 in a financial year.

One can also file it even their income is below the taxable limit or its zero (in which case it’s called NIL return). Filing Nil return will act as proof of accumulated funds in your bank accounts or other investments.

Here are the 8 benefits of ITR.

There are various benefits if one files ITR irrespective of their income. Below I have listed a few benefits of filing ITR.

Benefit #1 – Proof of accumulated earnings over the years

It might happen that a person is earning some small income over the years which is below the taxable limit and over the years they accumulate good corpus. Now it may happen that they might get tax scrutiny for some reason after a few years.

If someone has not filed the ITR over the years, it will be a lengthy and tiresome process to explain the sources of earnings over the years. However, with ITR, it will be legal proof of income earned in each year.

Benefit #2 – VISA processing

If you are traveling overseas or planning to travel in the near future, proof of earning is required. If you are salaried than the employer certificate will work but if you are self-employed than income details are needed to be submitted. So, ITR return will work as income-earning proof.

ITR is required as one of the documents for visa application

Benefit #3 – ITR serves as proof of income for Self-employed

Being self-employed does not provide earning proofs such as salary certificate from the employer and form 16. So, having ITR ready with you as proof of income is the most convenient proof.

Benefit #4 – One can Carry forward capital losses

If you have incurred capital losses, the Income Tax Act allows you to carry forward losses for eight consecutive years, and balance it against future gains and income.

To keep a track of your losses, the Income Tax Department has laid out that, Losses for a year cannot be carried forward unless that year’s return has been filed before the due date. So, even if it’s a loss return, you do not have any income to show – do file your return before the due date to declare the capital loss incurred.

Benefit #5 – Helpful for those with very small earnings

There are many people who get some small incomes such as

These people total income might be below the taxable limit and they might feel that they are not supposed to file any tax returns, as they don’t have to pay any tax (because TDS is already deducted). But by filing ITR they will get legal proof of income (in case they need it).

Benefit #6 – Claiming Tax Refund

If you have paid excess tax on your income, then you can file for a refund from the income tax department. In order to get this refund, it is mandatory that you file ITR.

Getting a refund of your taxes feels like getting a paycheck credited. Many salaried people don’t file their ITR as they feel that the tax on their income has already been deducted and they have form 16. But, it might happen that, the employer has paid more tax on your behalf, not taking into consideration your actual house rent, tax-saving investments or insurances. So, in that case, filing of ITR will lead you to ask for a refund from the IT department.

Benefit #7 – Ease of getting loans

If you apply for any loans such as a home loan, car loan, etc., then ITR for the last 2-3 yrs is asked as the mandatory documents. ITR will help your lender to assess your repayment capacity and is an important document. A lot of people who have not filed ITR on time rush at the last minute for these documents, so why not better file it on time?

Benefit #8 – Buying a high life cover

When you buy higher life insurance cover the Insurance company asks for proof of income to assess the cover amount to be provided to you. For this salary slip, bank statements or ITR of the last 3 consecutive assessment years are required.

It might happen that you don’t get a salary receipt or your monthly income is being paid from different groups so bank statements will also not work as strong proof. So, better to have an ITR return filed.

Do you know someone who should file ITR in your circle/family?

I hope the above points will make you understand why it is always preferable to file ITR, even if it might be NIL return. In a lot of families, there are people whose name there are small incomes like dividend income, income from tuition fees, small business income and this article applies.

So make sure you start filing an ITR for them and save yourselves from the future hassles involved.

Do share your views, experiences and ask queries through comments.

How to earn 25,000 as an extra-income (while keeping your day-job) in 3 simple steps

Here is a guest post from Zubin Ajmera from Progress & Win (detailed bio at the end) .. He would like to share his insights on creating extra income while you are at job.. Over to him.

If I have to tell you the latest trends and fantasies of Indians these days, it would be 4 things :-

  1. Going on dating apps (“Forget Tinder, did you check out this new app?”)
  2. Trying a new restaurant (“We should really go to this new cafe opened last month, they serve the most delicious desserts”)
  3. Watching the latest movie (Robot 2.0?), or the new series on Netflix (“Did you watch Sacred Games, or Narcos?”). I mean, look at this craziness
  4. Starting a business (“Sometimes, I feel my manager doesn’t understand it! I just want to quit my job and start something of my own!”)

Today, I want to talk about the 4th — starting a side business. And it’s funny because the moment I tell this, the instant choleric reaction is:-

  • “Uhh, I’m already occupied with so many things. I don’t have enough time”
  • “Business?? I don’t even know where to start from”
  • “Why will anyone pay me? I’m not an expert”
  • “I’ve an idea in mind, but not sure if it will work!”

I call these Mental Scripts, these are some of the barriers you have in your head when starting anything new.

I don’t necessarily blame anyone for this. The fact is, we live in this “startup ecosystem” where you’ll come across hundreds of sites talking about technology, ecommerce, and mostly hear words like — “funding, investors, seed round A, renting office space, hiring”, etc.

I want to tell you that all of that is possible, but you CAN take a different route. A different route might mean –

  • Starting a tiny business while still working at your day job (so eventually you’ve an option to quit your job)
  • Working on something you’re interested in or deeply care about. For eg: I love to research and spend on perfumes. My weird dream is to start a business on it someday. Not kidding, just look at my enrapturing expression when I buy a new one online –

The expression after you order your favorite thing on Amazon

  • Creating a second income stream
  • Finding your first paying customer (Apple sold its first iPhone on 29th June, 2007 Flipkart got its first customer in October 2007. Moral for you — It all starts with ONE)

In fact, imagine how life looks like if you have 2 paychecks deposited in your bank account every month. A second income rolling in.

For most of us, the bulk of our fixed income comes from our salary. What if you added one more stream to your income? That one stream might not be equivalent to your salary, but even an extra, say 25,000 — what do you think you can do with that?

  • Pay for petrol or other bills
  • Cover up for rent
  • Buy that extra pair of clothes or shoes
  • Take someone out for a lavish dinner
  • Maybe take a short weekend trip to some new place?

 
Here, I’ll show you what that second stream of income looks for me –

This was from November itself. Each customer worth $50

And let me show you what a business where you’re your own boss looks like for other ordinary people, who are just like you and me –

  • Deepak Kanakaraju teaches digital marketing through his online courses and workshops
  • Sandeep Singh sips a chocolate milkshake at a coffee shop, while he finds/reports online security loopholes for tech and ecommerce companies
  • Karan Batra is a finance expert who provides various tax and finance saving services
  • Ritika Tiwari is a writer, who provides content writing services for many websites and companies

Google all of them, and there are plenty of others who were working professionals and started as beginners. See more examples here.

Is this a dream “not possible”?

No! With a few simple steps, this is achievable. It’s not even a distant dream, you can start earning more in as little as 6 weeks and build a sustainable income — for life.

Let me show you how.

The simple framework to start a side business (in 6 weeks or less)

It boils down to 3 simple steps:-

Step 1: Find an idea

Step 2: Niche it down

Step 3: Get your first 1-3 paying clients

That’s it. I’m not going to throw 100 different things at you (“start a website, buy a domain, get the xyz discount”) to confuse you further.

I’m not even going to use complicated jargons you’ve never heard of, you really don’t need to when you start off.

It’s kind of like when you start working out at the gym. Your goal initially is not to lose 20 kgs, but maybe a tiny goal to lose 5 kgs first.

That’s the goal here as well. To find an idea, test it, and get your initial clients. Do these 3 steps, and boom — you’ve a functioning business.

And the interesting part is all of this is possible while sitting in your office desk….doing your work…on the laptop…..or on a weekend….or coming home after work….or after dinner….just by spending 5-7 hours per week

Let’s go through the details of each.

Step 1: Find an Idea

Tool required: A pen and a paper (do not ask “what fancy tool should I use?” There isn’t)

Time required:  15-20 minutes

You’d be surprised when I tell you this —  80% of my readers face this challenge, which is coming up with an idea.

  • “I don’t have any ideas”
  • “Where should I start from?”
  • “Zubin, I have an idea, but I am not sure if it will work”

It’s kind of like an “excuse” you make to cover up on not taking action. But you also make it sound “correct” in your head, so you think what you’re doing is right.

For eg: “I don’t have enough time” is the most common one you’ll find. Here’s an interesting comment on one of my articles for YourStory – (You can check my full response here btw.)

A big part of starting a side business is internalizing your inner psychology and mindset. (And it’s never about “which domain to pick”, or “what the name of your company should be”)

Let me show you 2 simple techniques to come up with atleast 10 different ideas in under 15 minutes. I’ve used them and I still do, many of my readers have, and it continues to work.

One quick caveat is to stop censoring yourself as you go through this process. No telling yourself “I can’t do this”, “I’ll do this some other day maybe”

Much of this is about creativity, testing, taking action, and eventually having fun with it.

Technique #1: The YUS Technique

I call it Your Unbeatable Superpowers (YUS). Each one of us is different. Our story is different — where we come from, experiences we’ve had, people we meet, places we travel, stories we know, food we eat, clothes we wear, etc. This is what makes you unique.

So, how can you monetize these experiences? How do you turn your unique experiences into profit viable ideas?

Answer the key elements below:-

  • Experiences you’ve gained — like learning algebra or studying architecture, finance or consulting, traveling by spending less, doing interior designing
  • Skills you’ve developed — like playing a guitar, working on excel, taking better photos, coding in java
  • Challenges you’ve faced and overcome — like treating foot pain, getting the perfect muscular body, losing weight, learnt to write better
  • Achievements you’ve been awarded for — maybe you got a promotion, or a high MBA score, or bought a car from your own pocket, or stood first in a swimming competition

Write down as many you can think of.

Technique #2: The Detective Hat Technique

I want you to answer these questions –

What would you do on a Sunday morning after your morning breakfast?

You wake up at 10 am (hey, it’s SUNDAY!), spend another 10 minutes on your bed. Brush your teeth. Take a bath. Have your breakfast.

Now after all this, what do you usually do?

Will you go to the gym? Read business websites? Watch cooking videos? Go to a networking event? Arrange your next travel trip?

Write it all down!

What do your friends/family struggle with and ask your help for?

Do they come to you for design advice? Or ask you about finances? Or they need help with planning an event? Learning how to create excel spreadsheets? Advise on what phone/laptop to buy?

Remember, no idea is a bad idea at this stage. I want you to list down EVERYTHING you can think of when using the techniques. You’re not allowed to

  • Chalk out any idea
  • Think “this idea isn’t possible” (How do you know?)
  • Critic yourself (“I am not an expert”)

We’ll remove some of these ideas, don’t worry. I’ll show you how to identify and eliminate the bad ones. But, we’ll address all of these concerns later.

Right now, just put everything on the page.

Great! With using just these 2 techniques, you now have a list of 10-15 potential ideas. (If you also want to see the Book Shelf and The Flight technique to come up with more ideas, check below here.)

Here’s how your list might look like –

This is from one of my readers. A simple exercise, and you already have so many ideas

Awesome! Pat yourself.

Now, I want you to pick one idea. Do not obsess over this. Pick one idea. Do inky-pinky, or something that interests you, or what idea catches your eye when you look at the list, or just ask your mom (she gives the best advice sometimes trust me) — that’s not the point.

The point is to pick 1 idea to test and validate, and move to the next step. A lot of people get stuck at this step alone. Treat this as a system. You simply follow the steps, trust the process — and you will see results.

Step 2: Niche it Down

Tool required: Just your creativity

So, you’ve an idea. Now, let’s determine who can be your potential customer/client.

In marketing, there is a golden rule penned by author Tim Ferris in his book, which goes — “if everyone is your market, then nobody is your market”

Once you have a rough idea, the next step is to identify the person who will pay you. Don’t go after each and every individual you can think of.

Ask yourself – Who is my ideal client?

Bad answer: My ideal client is 18-35 year-old men

Really? An 18-year old college “dude” has almost nothing in common with a 35-year old professional. They are at different stages in their lives, have different goals, their lifestyle is different, and they have completely different mindsets.

GET REALLY SPECIFIC! I cannot emphasize the power of getting super-specific.

Good answer: 30-35 year-old men who are working professionals

Amazing answer: 27-35 year-old men who are working professionals, in the IT industry, living in Mumbai. They typically work in IT, Banking, Finance companies. They are either middle or senior level professionals in their career. They work largely on these xyz softwares, excel spreadsheets, and emails. Most of them are married. They commute either by train or a bus. They spend most of their time on social media (Facebook and LinkedIn.)

I mean, look at that amazing answer above. I love you already!

The more specific you get, better your chances of early success. When thinking of your ideal client, you want to deeply understand :-

  • Age
  • Location
  • Demographics
  • Where do they hang out often?
  • What do they read, watch, listen?
  • Where do they go to solve their problems?
  • Type of industry they are in
  • etc.

Let me walk you through an actual example. Say our idea is — “content writing”

Who is my ideal client? Maybe we come up with –

  • Marketing agencies who require content writers on a part-time basis
  • Authors or bloggers who require for their website or a new book
  • Small scale companies who need for regularly putting out new content for their blog and social media channels

Say we pick the first one — marketing agencies, since the demand for content writers might be more there. Agencies need content writers everyday!

Again, the point I want to emphasize is do not obsess over and over again. Pick one and move to the next step. With a little testing and refinement, you will learn a lot more, than to simply sit and daydream on it.

So, where are we? You’ve an idea — you’ve narrowed it down for a specific market, you know EXACTLY who would be a good target audience for your idea.

Alright, great then, this is a good start!

Step 3: Getting Your First 1-3 Paying Clients

Back in the day, getting a client meant doing some grilling work — months and months of waiting, no response, following up repeatedly, all a dreadful process. Oh, and by the way, how can we forget there was less internet access and penetration!

Today, finding your first paying customers is pretty quick, cheap and easy. Let me show you the cheapest and a free way of getting a client.

Go Direct!

Yes, just go direct — send an email, or meet in-person, or do a direct cold call.

My recommendation: Start with 5-10 emails a week. Can you do that? Don’t answer that, since the answer to that question is “Yes, you can!” So, you better not give me the “I don’t have time excuse!”

With about 30 minutes per day, you should be able to send 10-12 emails (even while watching Netflix on your laptop, OK?).

Let me go one step further and show you an exact word-for-word script to send.

The 5-Point Formula Email Script to Get your First Paying Client

Few things which make this deceptively simple email work like magic –

  • It’s simple and casual (you feel you’re talking to this person friendly. No “sir”, nothing formal)
  • It’s not too short, and not too long, yet it covers all important points —
    • a quick intro
    • services you can offer
    • problems he has
    • benefits to him
    • a call to action
  • Not all of your recipients will respond, but a few will, and that is your road to turning those into paying customers

Once you set the foundation of getting your first client correct (i.e. you know your idea is validated, there is demand for it, you’re getting responses to your emails, etc.) — you can then scale. You can get your next 10 or even 100 clients pretty easily.

Conclusion, and Your Next Step

Unlike other “digital marketing” gurus, who preach overwhelming stuff –

  • “You NEED a website. Here is the 50% discount on the hosting provider”
  • “Just do affiliate marketing” (Blunt truth: you will not see any results for the first 6 months alteast!)
  • “You must have a Facebook page!”

These are the same advises I got, and which you will get too.

Instead, without setting up a website or a facebook page or any fancy bells and whistles, which is all for later, start with this simple 3-step system. I’ve used it, many have, and the best thing about it? IT WORKS!

Forget Black Friday, here’s my “give-me-a-slap-if-it-doesn’t-work” guarantee offer: Apply this proven system, and you WILL see results. If you don’t, I’m open to get slapped (just don’t hit me hard, please!)

About the Author: Zubin Ajmera

After his 5-year stint in USA, Zubin returned back to India. He’s a Content Marketer, Founder of 2 online businesses, and started Progress and Win, a site where he helps working professionals and beginner bloggers start an online side business from scratch, using tested techniques and strategies.

He believes in a strict “no-B.S” approach, has been covered on Entrepreneur India, YourStory, directly worked with 2 authors, 4 CEOs, and featured on multiple other brands.