Income tax savings: Today (21 March) has been left for the financial year 2024-25. This also means that for those who had chosen the old tax system, there are only a few days left to save income tax in this financial year. In such a situation, the time has come to take steps to save tax! If you are looking for tax savings equipment that provide income tax deduction to reduce your taxable liability, you can choose some investment options that are capable of saving you.
ELSS
ELSS is eligible for tax deduction in investing in mutual funds. The ELSS comes with a 3-year lock-in period, and it is also more risky than other investments in the region, as the ELSS is associated with the stock market. According to Ujjivan Small Finance Bank, by investing in it, you can claim a tax deduction of up to Rs 1.5 lakh per year from your total income under Section 80C of the Income Tax Act. Investments to claim this deduction must be made before 31 March.
National pension system (NPS)
The National Pension System is a retirement savings scheme that provides additional tax benefits under Section 80 CCD. NPS allows you to create pension funds. The contribution of up to Rs 50,000 in NPS will get a tax deduction of up to Rs 1.50 lakh in addition to the range of Section 80C. This encourages long -term savings for retirement by providing attractive investment options. Provides market -related returns with high growth capacity compared to traditional equipment. If you do self-employment, you can be claimed as a 20% deduction of your gross income.
Health and Life Insurance Premium
If you want, you can also save tax by purchasing health insurance or life insurance. Under Section 80D of Income Tax, you can claim deduction on the premium paid for health insurance for your, your spouse, children and parents. According to the current provisions, the maximum cut is ₹ 25,000 (or ₹ 50,000 for senior citizens), which promotes health and financial security. Life insurance policies are eligible for deductions under the premium section 80C. However, to get tax benefits, ensure that the annual premium is less than 10% of the sum insured.
PPF
PPF i.e. Public Provident Fund is a long -term investment option that provides attractive interest rates and returns on the amount invested. In this, there is a tax exemption of up to Rs 1.5 lakh under Section 80C of Income Tax. To get a tax exemption, you have to open a PPF account under this scheme before 31 March and the amount deposited during one year can be claimed to be deducted under Section 80C. Any person wants to invest in PPF can start with a minimum investment of Rs 500. However, the maximum investment amount is Rs 1,50,000 per year.
5 year tax saver FD
Keeping tax savings in mind, you can consider tax saver FD or post office time deposit in any scheduled bank. However, the minimum investment period in it should be 5 years. Apart from bank FD, the post office also has a time deposit scheme for 5 years in which you can invest money. Tax deduction of up to Rs 1.5 lakh is allowed under Section 80C of the Income Tax Act, 1961, even if the interest earned on the FD amount is taxable.
