What can you do to save income tax?  know in detail

What can you do to save income tax? know in detail

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new Delhi. Tax Saving Schemes: In this budget also, the Modi government has not given any special concession to the taxpayers to save tax. Every taxpayer wants to save as much tax as possible, although it is not easy to do so. If you also want to save more tax then it is very important to do financial planning. Today we will tell you about some such schemes, which will prove beneficial for you.

Let us tell you that all these schemes are recognized by the government and while investing in them you do not have to worry whether you will get money or not.

Public Provident Fund (PPF)

The best government scheme to save income tax is considered to be PPF (Public Provident Fund). You can invest up to Rs 1.5 lakh annually in PPF. In this, income tax exemption is available on investment under section 80C. The government guarantees investment in PPF, that is, the money will not sink. At present, the government is giving 7.10 percent annual interest on PPF.

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National Pension Scheme (NPS)

National Pension System (NPS) is a government retirement savings scheme. Under Section 80C of the Income Tax Act, in addition to Rs 1.5 lakh in tax, the benefit of Rs 50,000 can be taken. By investing in NPS, you can avail total income tax exemption of Rs 2 lakh. You can start investing from Rs 1,000 a month. Any Indian citizen whose age is between 18 to 65 years can open an account in this scheme.

Life Insurance

Tax saving exemption is available on investment in Unit Linked Insurance Plans (ULIPs). There will be no tax exemption on the premium going in ULIPs above Rs 2.5 lakh. As per the existing income tax laws, maturity income of life insurance policies is exempt from tax under section 10(10D). The combination of insurance and investment in ULIPs comes with a lock-in period of 5 years.

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Tax Saving FD

You can save income tax by investing in tax saving fixed deposits. Investment in tax saving FD is locked for 5 years. Tax saving FD interest rates change from time to time. Tax saving FD investment is a safe and guaranteed return option. You can avail tax exemption under 80C on fixed deposits up to Rs 1.5 lakh per annum.

Equity Linked Savings Scheme (ELSS)

Equity Linked Savings Scheme (ELSS) is a type of equity fund and it is the only mutual fund that offers tax exemption of up to Rs 1.5 lakh under Section 80C of the Income Tax Act. Returns/Profit up to Rs 1 lakh per annum in ELSS is not taxable. ELSS has the shortest lock-in period of 3 years which is better among all tax saving investment options.

Tags: PPF, Tax saving, Tax saving options

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