Tax Savings: It is important to keep in mind that deduction on investments made under section 80C or section 80D is available only in the old income tax regime. If you are using the new income tax regime, then you will not get the benefit of deduction on investments in section 80C and 80D
Tax Savings: For tax-savings, you can invest in PPF, SSY, ELSS and NPS till March 31. If you do not invest in these investment options till March 31, then you will not be able to claim deduction for this financial year. Investors who have invested in these investment options need not worry. Experts say that even if you have invested in these investments, you should review them once. The reason for this is that if there is any kind of shortfall in the investment, then investment can be made till March 31 to make up for it. It has to be kept in mind that deduction on these investments is allowed only in the old regime of income tax.
Deduction on investment up to Rs 1.5 lakh under section 80C
In the old regime of income tax, under section 80C of the Income Tax Act, 1961, it is allowed to claim deduction of up to Rs 1.5 lakh in a financial year. About a dozen investment options come under this section. These include PPF, SSY, NPS, ELSS etc. Deduction can be claimed by investing in any one of these schemes or in more than one scheme. But, it has to be kept in mind that whether you invest in one scheme or more than one scheme, you can claim a maximum deduction of up to Rs 1.5 lakh in a financial year.
Deduction on health insurance premium under section 80D
If you have not bought health insurance, you can buy it till 31st March. This will enable you to claim deduction on its premium while filing income tax return for this financial year. If you buy health insurance after 31st March, you will not be able to claim deduction on its premium while filing return for this financial year. A person can buy a health policy for himself and his family and claim a maximum deduction of Rs 25,000 on its premium. If your age is more than 60 years, you can claim a deduction of Rs 50,000. Apart from this, a deduction of Rs 50,000 can also be claimed on buying a separate health policy for elderly parents.
Be sure to keep these things in mind while investing
You have to keep in mind that the purpose of investment should not be just tax-savings. You have to invest keeping in mind your financial goals. If you can take a little risk, then you can invest in the tax scheme of mutual funds. This scheme is also called ELSS. ELSS has the highest return among tax-saving investment options. It has a lock-in period of three years which is the shortest lock-in period among tax-saving investment options. If you cannot take risk, then you can invest in bank tax-savings FD or PPF. But, it has to be kept in mind that while the lock-in period in bank tax-savings FD is 5 years, PPF is a long-term investment. It matures after 15 years.
