New Delhi. Tax Saving Schemes: Everyone takes a new vow on the new year. Most of the people are seen taking a resolution about giving up some or the other bad habit. It is a good thing to leave bad habits, but if some good habits are adopted along with giving up bad habits, then sleep will be pleasant. To adopt good habits, we are talking about financial planning here. Financial planning is very important for a good future.
Now before entering the new year, we are telling you that you should take a new year resolution regarding tax saving. You can increase your savings by saving tax. Today we are telling you some such government schemes, with the help of which you can save tax.
Public Provident Fund (PPF)
PPF scheme is considered to be the best government scheme to save income tax. You can invest up to Rs 1.5 lakh annually in PPF. The government guarantees investment in PPF, that is, the money will not sink. At present, the government is giving 7.10 percent annual interest on PPF. In this, income tax exemption is available on investment under section 80C.
National Pension Scheme (NPS)
National Pension System (NPS) is a government retirement savings scheme. Under Section 80C of the Income Tax Act, in addition to Rs 1.5 lakh in tax, the benefit of Rs 50,000 can be taken. By investing in NPS, you can avail total income tax exemption of Rs 2 lakh. You can start investing from Rs 1,000 a month. Any Indian citizen whose age is between 18 to 65 years can open an account in this scheme.
Sukanya Samridhi Yojana (SSY)
You can save tax by opening an account in Sukanya Samriddhi Yojana in the name of your daughter who is less than 10 years of age. This is a small savings scheme, which has been started by the Modi government. Income tax exemption can be availed in this scheme by depositing a maximum of Rs 1.5 lakh annually. At present, the government is giving 7.6 percent annual interest on this scheme.
Senior Citizen Savings Scheme (SCSS)
Senior Citizen Saving Scheme is a better savings scheme for senior citizens. This savings account can be opened in a bank or post office. Income tax exemption can be taken under 80C on the amount deposited in this account. A maximum of Rs 1.5 lakh can be invested in this annually. At present, there is a provision of interest at the rate of 7.4% per annum.
Life Insurance
Tax saving exemption is available on investment in Unit Linked Insurance Plans (ULIPs). There will be no tax exemption on the premium going in ULIPs above Rs 2.5 lakh. As per the existing income tax laws, maturity income of life insurance policies is exempt from tax under section 10(10D). The combination of insurance and investment in ULIPs comes with a lock-in period of 5 years.
Tax Saving FD
You can save income tax by investing in tax saving fixed deposits. Investment in tax saving FD is locked for 5 years. Tax saving FD interest rates change from time to time. Tax saving FD investment is a safe and guaranteed return option. You can avail tax exemption under 80C on fixed deposits up to Rs 1.5 lakh per annum.
Equity Linked Savings Scheme (ELSS)
Equity Linked Savings Scheme (ELSS) is a type of equity fund and it is the only mutual fund that offers tax exemption of up to Rs 1.5 lakh under Section 80C of the Income Tax Act. Returns/Profit up to Rs 1 lakh per annum in ELSS is not taxable. ELSS has the shortest lock-in period of 3 years which is better among all tax saving investment options.
