New Delhi: Generally, people think about tax saving when the financial year is about to end. In an effort to save their taxes, they make two mistakes. First, they invest heavily in Fixed Deposits or insurance together. This puts a financial burden on them. The second mistake is that they don’t think about the advantages and disadvantages of investment. To make a sound investment, it is important to invest from the beginning of the financial year.
If, you have not done any tax planning, we are going to tell you about 5 best options for tax saving.
Sukanya Samriddhi Yojana
You can get tax exemption on Sukanya Samriddhi Yojana investments. If, you have 2 daughters who are below 10, you can invest two SSY accounts for both the kids. The lock-in period is till the girl turns 18 years of age. The interest received in this scheme is completely tax-free. Up to Rs 1.5 lakh can be invested in this in a year.
ELSS Fund
You can start your tax planning by investing in Tax Saving Mutual Fund i.e. ELSS Fund. It is considered to be the most modern and easiest option for tax saving. The best thing about ELSS is that its lock-in period is the shortest compared to other investment options. Here you have to invest for a minimum of 3 years. The returns here are also good compared to other investment options.
There are many ELSS funds in the market, which have given annual returns of up to 31.51 percent. You can invest here through monthly SIP. These are quite low cost. However, these are equity funds. And there is market risk in these.
NPS for tax saving
NPS is another means of investment to save tax. NPS has remained the top tax saving investment option for individuals. Here you can save tax under three sections. Under Section 80C of the Income Tax Act, tax deduction can be claimed on contributions up to Rs 1.5 lakh annually. Extra deduction of Rs 50,000 under Section 80CCD (1B) can also be claimed for investments made by salaried employees. Apart from this, if the employer contributions to NPS is deductible under section 80CCD (2).
ULIP
ULIP is another investment for saving tax. This method of investing in insurance gives decent returns along with tax saving benefits. ULIPs have given returns of 8.15 percent in the last 5 years. Compared to ELSS, here if the returns are above Rs 1 lakh, 10 percent tax is levied.
Senior Citizen Saving Scheme
People who are above 60 years of age can invest in Senior Citizen Saving Scheme. The lock-in period here is 5 years. Senior citizens can get tax exemption on interest up to Rs 50,000. On investment up to Rs 6.25 lakh, you can get tax free returns.
Tax saving schemes: You should start your financial planning from the start of a financial year. If, you have not done any tax planning, we are going to inform you about 5 best options for tax saving. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
