Looking for Tax Saving Options Under IT section 80c?
With less than 3 months to go before this budgetary year closes, investors are in a hurry to save tax and submit tax declarations onto their accounts sections. Wealth managers state there is a general aversion to value connected tax-saving items among investors in the final-hour hurry to invest due to the commotion in the stock market.
Best Tax Saving Options Under IT 80C Section
They say those unwilling to risk could select more secure instruments, for instance, the public provident fund (PPF). One can put up to Rs 1,50,000 in a financial year and save tax under Section 80C of Income Tax Act.
The below mentioned are the Best Tax saving option Under IT 80C Section;
#1 Public Provident Fund [PPF]
PPF is truly outstanding and most secure long-term investment choices. It is the primary thing that rings a bell when wanting to save cash. This 15-year investment plan is useful for both business and salaried individuals. With a tax-exempt 8.8% interest (continues changing), one needs to submit no less than an amount of Rs 500 and a maximum of 1 lakh for every year. Set under Income tax section 80C, it gives a tax exception for salaried individuals.
#2 Life Insurance
Bringing down your assessable portions, life insurance premium likewise come below IT section 80C. The premium you pay on your life coverage premium is deductible from your taxable income. It is one of the main assessments saving investment under section 80C.
#3 National Saving Certificate [NSC]
However, another investment form which helps tax relaxation under the 80c income tax, NSC is for 5-10 years with an interest rate of 8.6 to 8.9%. NSC can be purchased online or from the post office.
#04 5-year Bank FD (fixed Deposit)
Bank FDs with a term of 5 years are qualified to give tax relief under section 80C. You have to request that the bank gives you a Tax Saver FD and a stamp is put on the FD receipt demonstrating a lock-in period of 5 years. For this situation, you cannot loan or even an untimely withdrawal. It gives an interest rate of 8.5%.
#5 Pension fund
Pension fund deduction is marked under 80CCC which is a part of 80C offering a tax relief for a maximum of Rs. 1 lakh.
#6 Five year POTD (Post Office Time Deposit) system
Much the same as bank fixed deposits, post office time deposits are additionally an incredible method to contribute cash and get relaxation on tax under section 80C. It offers an interest rate of 8.5% and the term may vary from 1 year to 5 years, however, a tax rebate is just on 5 yr POTD scheme.
#7 Senior Citizen Savings Scheme [SSCS]
SSCS is intended for individuals who are 60 years or above. It offers 9.30% per annum. With a maturity time of 5 years, this plan can be stretched out for 3 more years. Once the interest sum crosses Rs 10,000 of every budgetary year, the interest payable quarterly is liable to TDS as well as taxable.
#8 Equity Linked Savings Schemes [ELSS]
ELSS Mutual Funds are tax saving plans that are equity differentiated and contribute the major part of the reserve corpus either in values or value related instruments. Being market-connected, equity-linked reserve funds plan or ELSS funds offer great returns. ELSS reserves are tax-free returns that offer tax-exempt returns and furthermore permit tax deductions up to INR 1,50,000 under section 80C of Income Tax Act.
#9 Employee Provident Fund (EPF)
EPF is commonly deducted from the pay of a person which incorporates 12% of their basic pay. The business additionally contributes the comparable level of which 3.7% goes to the EPF and the remaining 8.3% goes towards the pension fund. It is a defined benefit scheme with financing costs being set each year. There is no tax on investing in EPF. Likewise, the interest earned is additionally tax-exempt. At the time of retirement, people can withdraw the entire sum in their account and use it.
#10 Unit Linked Insurance Policy [ULIP]
Under a ULIP, some portion of your investment is invested into Mutual Funds (Equity, Balanced or Debt fund) as well as the remaining is contributed towards your life cover. One can save tax by putting resources into ULIP under Sections 80C, 80CCC and 80D of the Income Tax Act. In addition, the interests earned on your ULIP investment are tax-exempt. Additionally, under segment 10 (10D), tax-free maturity benefits are accessible too.
You can also go in for tax saving other than 80c. The following are the tax saving options other than 80c;
- NPS National Pension System under subsection 80CCD (1B)
- Rajiv Gandhi Equity Savings Scheme (Section 80CG)
- Interest on education loan (Section 80E)
- House rent allowance (Section 80GG)
- Home Loans u/s 80EE
- Health Insurance (Section 80D)
- Donations (Section 80G)
- Medical treatment u/s 80DDB
These are the top best tax saving options under IT section 80C. For more updates on the tax savings and government schemes, keep visiting us.