Choose from the Best Tax Saving Blessings Under Section 80c

Paying tax is a matter for pride. It is a reason for pride in front of your family and friends. It’s a reason for pride to serve your country in whatever way you can. In a country such as India, however, the majority is the opposite. Fewer people enjoy paying taxes, so many end up taking illegal routes to avoid taxes. There are techniques that can not only save them taxes legally but also give them the opportunity to make some money.

The Income Tax Act, 1961 (Section 80c to Section80u) provides tax deduction options. ELSS, LIC and PPF are some of the options approved. These schemes can be easily invested and you will get your tax benefits. You can only save Rs 1,50,000 annually, however, as with all good things in this world, you will not be able to save more than that. If your investment exceeds Rs 1,50,000, you will not be able to receive Rs 1,50,000 in tax benefits.

Tax-saving is a major reason for investing. Which investment choice is best? To get tax exempt, where should you invest? Take a look at the options available and decide which one is right for you.

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ELSS This mutual fund follows the same model as other mutual funds. You can invest monthly via SIP, lump-sum, or both. However, ELSS has a lock in period of three years. That means that you cannot withdraw your money for the next 3 years, regardless of whether it is lumpsum or SIP. The returns can reach up to 15%-18% depending on the equity market, and in certain cases it can even reach 25-30%. If an investor is smart, it’s possible to not only save taxes, but also make a lot of wealth.

PPF- Private Provident Fund: This tax saving method was established in 1968 by Ministry of Finance (MoF). It allows investors to invest a maximum of Rs 1,50,000. The lock-in period is 15 years. Each year’s interest rate is different, but it averages 8% per annum. PPF withdrawals are exempt from tax, which is the best part.

EPF – This law was passed in 1952 to encourage retirement savings among employees across India. Employees’ Provident fund (EPF) is a pool of funds that has been built by regular monthly contributions from employees and their employers. EPF accounts can be used in the event of resignation or death. If the maturity tenure is more than five years, the withdrawals of interest earned and the amount deposited are exempted from tax. The interest rate is generally 8.50%. This option allows you to deduct the amount invested from your taxable income.

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NSC Some banks and post offices offer a National Saving Certificate, which allows for tax relief under Section 80c. The interest rate ranges from 8.6 to 8.9% and the lock-in period is between 5-10 years.

Bank Fixed Deposits: Section 80c allows for tax relief on fixed deposits that have a maturity term of five years or more. It offers an interest rate of 8.5%.

LIC Premiums for life insurance are also covered under section 80c. The premiums you pay on your life insurance policy can be deducted from your taxable income. You can choose from a variety of LIC plans under section 80c.

Tax savings is an important and responsible task that should be started early. To save taxes, one must plan well and not spend recklessly.