4 min read
Every year taxpayers make use of different legal platforms or tax saving investment schemes to help save some tax. These schemes can be opted for keeping in mind the tax deductions to enable tax saving in the best possible ways, and to increase income.
There are various rules under the income tax act that allow deduction on investment plans and savings plans that a taxpayer can acquire during a financial year to save tax.
Here are some such tax saving schemes that you can make use of to help you in saving some taxable amount.
Also Read: Investment Plans for a Girl Child in India
Under this section you can make a claim for tax deduction on home loans for an amount of up to Rupees 50,000.
Under this section you can invest an amount of 1.5 lakh rupees if you want to avail tax exemptions on your taxable income. Further, you can claim an added deduction of 50,000 rupees by making an investment in NPS or National Pension Scheme under section 80CCD (1b).
|Investment Plan||Available Returns||Lock-in Period|
|5-Year Bank Fixed Deposit||6% to 7%||5 years|
|Public Provident Fund (PPF)||7% to 8%||15 years|
|National Savings Certificate||7% to 8%||5 years|
|National Pension System (NPS)||12% to 14%||Till Retirement|
|ELSS Funds||15% to 18%||3 years|
|Unit Linked Insurance Plan (ULIP)||Varies with Plan Chosen||5 years|
|Sukanya Samriddhi Yojana (SSY)||7.60%||N/A|
|Senior Citizen Saving Scheme (SCSS)||7.40%||5 years|
Under this scheme you can have a maximum deduction of 1 lakh rupees by purchasing a medical insurance. This sum is further divided and can be used to insure health of your own self and your family/parents/senior citizens.
Among all the different options of knowing how to save tax, the most accepted ones are available under Section 80C. These saving options are available in the form of expenses and investments for HUFs or Hindu Undivided Family as well as for other individuals in India, and one can easily claim deductions on the same of up to 1.5 lakh rupees during a fiscal year.
The below table shows the various plans that you can invest on to save on your income tax during a financial year.
If you want to know how to save tax other than 80c section, you can also avail other deductions available under income tax Section 80.
The starting of a financial year is the best time to plan for your investments for income tax-saving options. Though most tax-paying citizens delay the process till the last quarter of a financial year, it is advised to get them done early on during the financial year to attain long-term goals.
Here are some pointers to help you plan your tax-saving for a financial year.
Also Read: Sukanya Samriddhi Yojana (SSY) Scheme
The above tips can be used to understand how to utilize the limit of 80C. The best option is to start investing early on during the first quarter of a budget year to attain maximum benefits throughout the year. Moreover, it will help you to stay relieved towards the end of the financial year.
Now that you know the various options on how to save tax in India, you can utilize these options in the best possible ways to save tax.
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