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Tax is something that every person is reluctant to pay to the government. No doubt it is hard parting with your hard-earned money. Therefore it becomes very important that investment is made properly and plans to save as much tax as possible.
Savings Plan Tax Benefits
Tax saving investments can deduct tax under section 80C or 80CCC, which proves helpful to most people. Many people are reluctant to invest due to the risks involved and low returns. However, incorporating the methods introduced further in the article will surely help people in what they want to achieve from the investments. A savings plan can help you save tax. We will explain this later in this article.
Earn Tax-Free Income
Planning and investing gaily will not only reduce your tax but also allow you to earn tax-free income. Gaining benefits from investments can be a little different for different people. It is, therefore, essential that they start planning now to assess their situation. Early investments in a financial year will help you to earn tax-free income.
Choose what is correct for you
There are numerous investment plans when one starts thinking and planning for the same. But the question remains the same - How to choose the best for us? Different investment plans may benefit people in different ways, therefore choosing what is best for you through multiple factors is essential.
You have to think whether the amount of return in this type of investment is profitable or not or whether this type of investment will benefit you in the long run or not?
Know the rules and conditions
It is better to know the rules and regulations regarding investments and taxes (Section 80C of The Income Tax Act) if you are going on the same road. If you are investing to save tax, you should be aware that all the investment parameters come under this act or Section 80C.
The investor can avail the benefit of tax exemption of up to Rs. 1,50,000 maximum under this Section 80C. Investing in Life insurance, Fixed Deposits, ELSS (Equity Linked Saving Scheme), national saving Schemes, Public Provident Fund, and Bonds can lead to an exemption in tax up to this maximum limit mentioned above.
Know More - How to Save Income Tax?
Some of the best investment plans
Here are some saving plans under Section 80C, which can prove highly beneficial should you want to invest.
|Equity Linked Saving Scheme (ELSS) Fund||15% - 18%||3 years|
|Public Provident Fund (PPF)||7% - 8%||15 years|
|Unit Linked Insurance Plan(ULIP)||Returns differ in respect of plans||5 years|
|National Pension Scheme(NPS)||12% - 14%||Till retirement|
|Bank FDs||6% - 7%||5 years|
|National Savings Certificate||7% - 8%||5 years|
|Sukanya Samriddhi Yojana||8.5%||N/A|
|Senior Citizen Saving Scheme||8.7%||5 years|
|Insurance||Returns differ in respect of plans||3 years|
At Canara HSBC Life Insurance, we will assist our customers in any difficulty or doubt regarding the investments plans and which one will be more beneficial.
Equity Linked Savings Scheme (ELSS) Mutual Fund
This mutual fund scheme has some prominent features:
ELSS offers great returns over a long period.
Public Provident Fund (PPF)
This contains the tax-saving feature by allowing the investors to make a financial pack post-retirement. PPF is given that status of EEE, that is, exempt, exempt, and exempt. This means that if you invest in a PPF account, then all the interest received and maturity funds will be exempt from taxes. This is why it is a very popular tax saving investment.
Unit Linked Insurance Plan(ULIP)
National Pension Scheme(NPS)
The Tax exemption in this scheme comes under three different sections:
However, 60% of the fund is taxable at the time of maturity. The annuity received by the investors is treated as income and is therefore taxable.
Fixed deposits done in banks are very safe, and returns are guaranteed. The interests vary from bank to bank. Here at Canara HSBC Life Insurance, you are sure to get good returns on security deposits.
National Savings Certificate
This is a government invested savings scheme, and so offered the safety of the investment.
Sukanya Samriddhi Yojana
This scheme has been put forward, especially for girl child. This scheme is a product of ‘Beti Bachao Beti Padhao’.
Senior Citizen Saving Scheme
The Senior Citizen Saving Scheme is purposely designed for senior citizens to invest safely.
Here at Canara HSBC Life Insurance, we offer this SCSS account and assist investors in whatever form we can.
Life insurance is very popular as well among most people and investors. However, life insurance investment should only be made for insurance, not for only tax saving purposes. The benefit of insurance coverage is provided to the investor, and they can also benefit from tax exemption up to Rs. 1.5 lakh under Section 80C and 10(10D) of the Income Tax Act.
The returns and the money back in insurance are also tax-free.
These are some ways to invest your money, and the investors can choose accordingly as to what best suits their requirements.