Saving tax is a big challenge in front of the salaried people. Most of the people get involved in the manipulation of saving tax in the last days of filing Income Tax Return.
Saving tax is a big challenge in front of salaried people. Most of the people get involved in the manipulation of saving tax in the last days of filing Income Tax Return. But through a little planning, if you want, you can save a huge part of the tax, the government itself has given many avenues for this, through which income tax can be saved. We are going to tell you about the 11 ways that come under 80C, by which you can save tax of 1.5 lakh rupees annually.
1. Tax Saver Fixed Deposit (FD)
If you invest in fixed deposits with a tenure of 5 years, you can save up to Rs 1.5 lakh as tax. At present, fixed interest of 7-8 per cent is available on such FDs. But the interest earned on this is taxable. Tax saving FDs are exempted under section 80C only.
2. Public Provident Fund (PPF)
Public Provident Fund is a government savings scheme. You can invest in it by visiting all the banks and post offices. It has a lock in period of 15 years. Its interest rates change every quarter. Once it used to get interest of more than 8%, but now it gets 7.1%. The interest earned on PPF is tax free.
3. Equity Linked Savings Scheme (ELSS)
Equity Linked Saving Schemes ie ELSS are considered to be a better way of investment. Its lock in period is 3 years. Long term capital gains tax of 10% is applicable on its returns. LTCG is tax free on redemption up to Rs 1 lakh in a financial year, subject to a tax of 10%. As the name suggests, 80% of it is invested in equities.
4. National Savings Certificate (NSC)
The interest rate on the National Savings Certificate for 5 years is fixed. The interest on NSC is 6.8% per annum. This is a traditional and old savings scheme, this investment is chosen by those people who do not have to take much risk. There is no limit to the amount you can invest in NSC. But only up to Rs 1.5 lakh tax exemption can be claimed in a financial year.
5. Life Insurance Policy
There are many types of life insurance policies. Through term insurance, ULIPs and endowment plans, you can save tax up to Rs 1.5 lakh annually. For this, the insurance cover should be 10 times the annual premium.
6. National Pension System (NPS)
This is a voluntary retirement scheme. By investing in this, you can collect money for retirement and can take monthly pension after retirement. In this you can save up to Rs 2 lakh as tax. You can save tax up to Rs 1.5 lakh under 80C, but you can save additional tax of Rs 50,000 under 80CCD (1B).
7. Home Loan Repayment (Principal)
When paying home loan EMI, you would know that it consists of two parts, first principal amount and second interest. On the principal amount, you can save up to Rs 1.5 lakh annually under 80C. Whereas a separate tax benefit is available on interest.
8. Tuition Fee:
If you pay tuition fees for the education of children, then you can claim 1.5 lakh rupees under 80C.
9. Employees’ Provident Fund (EPF)
Employees working in the organized sector invest 12% of their earnings in EPF every month. Under 80C, an exemption of up to 1.5 lakh is available on this annually.
10. Senior Citizen Savings Scheme The
Senior Citizen Savings Scheme is of 5 years. This scheme is for those people who have crossed the age of 60. Generally its interest rates are higher than FD. Its interest rate for the April-June quarter is 7.4%.
11. Sukanya Samriddhi Yojana (SSA)
The scheme of the Modi government is very good for those parents who have girls. Under this scheme, you can open a Sukanya Samriddhi Yojana account for a girl below the age of 10 years. The term of this scheme is till 21 years or till she gets married after 18 years. It comes under the category of EEE, that is, investment, interest and maturity are not taxed on anyone. As in PPF. You can start this scheme with an investment of Rs 250 to Rs 1.5 lakh per annum. At present, it is getting an interest of 7.6%.
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