As the New Year kicks off, so should your tax planning endeavors. Shielding your hard-earned money from income tax becomes a priority for many.
To simplify this process, we present seven tax-saving schemes that can help you retain a significant portion of your earnings. Here are the top contenders:
1. Public Provident Fund (PPF)
Invest in the Public Provident Fund (PPF) for guaranteed returns and a safe investment.
With a maturity period of 15 years, PPF falls under the EEE category, ensuring complete tax exemption on investment, interest, and maturity amount.
Currently offering a 7.1 percent interest rate, PPF allows tax exemption up to Rs 1.5 lakh under Section 80C.
2. Equity Linked Savings Schemes (ELSS)
Explore Equity Linked Savings Schemes (ELSS) of Mutual Funds for tax savings and potentially higher returns.
Enjoy a short lock-in period of 3 years while saving up to Rs 1.5 lakh under Section 80C. Be mindful of the associated risks before investing.
3. Sukanya Samriddhi Yojana (SSY)
Secure your daughter’s future by investing in Sukanya Samriddhi Yojana, offering an 8.2 percent interest rate.
Benefit not only from building a substantial fund but also from annual tax savings of up to Rs 1.5 lakh under Section 80C.
Available for a maximum of two daughters, with investments ranging from Rs 250 to Rs 1.5 lakh.
4. National Pension System (NPS)
Consider National Pension System (NPS) for tax savings under Section 80C and an additional Rs 50,000 exemption under 80CCD(1B).
Ideal for retirement planning, NPS offers the added advantage of a pension in old age.
5. Senior Citizen Savings Scheme (SCSS)
For senior citizens, the Senior Citizen Savings Scheme (SCSS) provides an attractive interest rate of 8.20 percent.
With investments ranging from Rs 1000 to Rs 30 lakh, SCSS allows tax exemption under Section 80C.
6. National Savings Certificate (NSC)
Invest in the National Savings Certificate (NSC) for secure and guaranteed returns.
Starting with Rs 1000, there is no maximum limit for investment, and an interest rate of 7.7 percent is currently offered. Enjoy tax exemption under Section 80C.
7. Tax-Saving Fixed Deposit (FD)
Consider a Fixed Deposit (FD) with a 5-year tenure for tax savings. Aptly named tax-saving FD, this option is available in banks and post offices, offering varying interest rates.
Utilize the flexibility to invest as per your preference while enjoying tax exemption under Section 80C.
Start your New Year on a financially sound note by exploring these tax-saving schemes tailored to suit different financial goals and preferences.
