Income Tax Saving: To get tax exemption, people resort to Section 80C and 80D of the Income Tax Act. There are many such schemes by investing in which you can get tax exemption under these sections.
new Delhi. Tax planning season has started and one question on everyone’s mind is how to save more tax. In this, the deductions received under Section 80C and 80D of the Income Tax Act help the income tax payers a lot. There are many investment options where you can claim deduction under these sections by investing money. Today we will talk about such tax saving investment options by investing in which you can save maximum tax.
However, there is a screw in this which tax regime you choose. If you opt for the new tax regime, you cannot avail any deduction. Whereas if you pay tax under the old system, then you will get a rebate on investment up to Rs 1.50 lakh. Tax exemption is not available in the new system because the rates are low in it. Let us see some preferred investment options for tax savings.
Public Provident Fund (PPF)
PPF (Public Provident Fund) is counted among the best government schemes to save income tax. You can invest up to Rs 1.5 lakh annually in this. In this, tax exemption is available on investment under section 80C of the Income Tax Act. PPF is a government-backed scheme, so there is no fear of money sinking in it.
Equity Linked Savings Scheme (ELSS)
This is a type of equity fund. This is the only mutual fund in which tax exemption is available on investment up to Rs 1.5 lakh. In this, even if you get a profit of Rs 1 lakh every year, it will not be taxed.
National Pension Scheme (NPS)
It is generally considered as a retirement planning scheme. In this too, apart from an investment of Rs 1.5 lakh, there is no tax on annual returns up to Rs 50,000. You can open it with an initial contribution of Rs 1,000 a month. Any Indian between the age of 18 to 65 years can open an account in this scheme.
Life Insurance
For life insurance policy, you can claim tax exemption on it by paying a premium of up to Rs 2.5 lakh. No discount will be given on premiums exceeding this. Under the current income tax laws, the amount generated on maturity of life insurance policies is tax free under section 10(10D).
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