Take the pledge to vote

For a better tommorow#AajSawaroApnaKal
  • I agree to receive emails from News18

  • I promise to vote in this year's elections no matter what the odds are.
  • Please check above checkbox.

    SUBMIT

Thank you for
taking the pledge

Vote responsibly as each vote counts
and makes a diffrence

Disclaimer:

Issued in public interest by HDFC Life. HDFC Life Insurance Company Limited (Formerly HDFC Standard Life Insurance Company Limited) (“HDFC Life”). CIN: L65110MH2000PLC128245, IRDAI Reg. No. 101 . The name/letters "HDFC" in the name/logo of the company belongs to Housing Development Finance Corporation Limited ("HDFC Limited") and is used by HDFC Life under an agreement entered into with HDFC Limited. ARN EU/04/19/13618
CO-PRESENTED BY
LIVE TV DownloadNews18 App
News18 English
272
nda:
Needmore seats to Win
Needmore seats to Win
upa:
»
3-min read

Want to Save Your Taxes? Here are Top 10 Investment Options

The best time to start planning your tax-saving investments is at the beginning of the new fiscal year since that gives time for your investments to compound and help you achieve long-term goals.

Trending Desk

Updated:April 24, 2019, 9:45 AM IST
facebookTwittergoogleskypewhatsapp
Want to Save Your Taxes? Here are Top 10 Investment Options
News18 Creative by Mir Suhail.
Loading...
It is that time of the year again when salaried taxpayers start looking for avenues to invest their money to primarily save tax, while also ensuring that they save for their financial goals. But it should be the other way round. Tax-saving should be the additional perk, not the goal.

The best time to start planning your tax-saving investments is at the beginning of the new fiscal year since that gives time for your investments to compound and help you achieve long-term goals. So, in case you are a salaried employee or a professional who is looking for investment options, here’s a quick and simple guide on the popular tax-saving instruments. These instruments are covered under Section 80C of the Income Tax Act that allows you to claim a deduction of up to Rs 1.5 lakh from your total taxable income.

1. Employee/ Voluntary provident fund (EPF/VPF): Contributions made towards EPF are considered for tax deductions. An employer deducts the contributory amount from an employee’s salary. Thereby, the tax is further reduced.

2. Public Provident fund (PPF): You can open this government-backed account at any bank or post office. Every year, you need to deposit a minimum of Rs500 up to a maximum of Rs1.5 lakh in your PPF account. It is compulsory to deposit an amount at least once a year. PPF accounts have a lock-in period of 15 years. After seven years, partial withdrawals are allowed. PPF contributions are exempted from tax. Also, the total amount you get on maturity is tax-free.

3. Sukanya Samriddhi Account: Parents can open an account in their daughter’s name by the time she is 10 years old. The account remains active for 21 years or till she gets married after turning 18. When she is 18 years old, parents can withdraw 50% of the saved amount. A person can deposit up to Rs 1.5 lakh per financial year under this scheme. This amount is exempted from tax.

4. 5-years tax saving fixed deposit in banks/post offices: Banks offer tax-saving FDs. These are similar to regular FDs but with lock-in periods of five years. However, they do not give high returns as they are not equity-linked. Also, the interest earned is taxable.

5. Life Insurance premium: You can avail various kinds of life insurance premiums for yourself or your family that are eligible for tax exemptions. You can claim a maximum of Rs1.5 lakh per year towards the insurance premium.

6. National Pension Scheme (NPS): The NPS is a government initiative. It provides pensions to people working in unorganized sectors or professionals who do not have pension facilities. NPS is an essential investment that comes with tax benefits. The tax benefits related to pension funds are deducted under Section 80C, 80CCC, 80CCD(1), 80CCD(1B), or 80CCD(2).

7. Equity-linked saving scheme (ELSS): An ELSS is one of the most sought-after tax saving investment options under Section 80C. These diversified equity funds invest a big chunk of their corpus in equities and related products. ELSS funds have the lowest lock-in period of three years (in comparison to other 80C schemes). In this scheme, every installment is considered a fresh investment and has to abide by this minimum lock-in period. These types of mutual funds often deliver higher returns than traditional saving options.

8. Home loans: Availing a home loan is a smart way to get tax benefits. Both the principal amount and the interest component of the home loan EMI are eligible for deduction. A part of the deduction comes under Section 80C. You can claim the rest under Sections 80EE and 24.

9. Unit-Linked Investment Plan (ULIP): A ULIP is essentially both an insurance and investment policy. A part of the amount you give towards this plan is invested in the stock market for higher returns. You can buy a ULIP in your name or in the name of a member of your immediate family to enjoy tax benefits.

10. Tuition fees for two children: With the rising cost of education in India, quality teaching for your children has become expensive. The income tax rules have tried to bring some relief in the form of tax deductions for amounts paid as tuition fees.

(Get detailed and live results of each and every seat in the Lok Sabha elections and state Assembly elections in Andhra Pradesh, Odisha, Arunachal Pradesh and Sikkim to know which candidate/party is leading or trailing and to know who has won and who has lost and by what margin. Our one-of-its-kind Election Analytics Centre lets you don a psephologist’s hat and turn into an election expert. Know interesting facts and trivia about the elections and see our informative graphics. Elections = News18)
Read full article
Loading...
Next Story
Next Story

Also Watch

facebookTwittergoogleskypewhatsapp
 
 

Live TV

Loading...
Countdown To Elections Results
  • 01 d
  • 12 h
  • 38 m
  • 09 s
To Assembly Elections 2018 Results