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best tax saving investment options you can consider

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Tax saving investment

new Delhi. Due to the Corona epidemic, the Central Government has taken many steps to provide financial help to the people. One of which is also about tax savings. The Central Government has extended the date of filing income tax returns for the financial year 2019-2020 to 30 November 2020 and the tax saving investment time of 2019-20 has also been increased from 31 March to 30 June 2020. In such a situation, taxpayers still have a week's time in which they have many such investment options through Section 80C of Income Tax for tax savings which can still be tax deductible by investing. However, the government has given an option to choose new tax and old tax option in the 2020 budget. In such a situation, if you choose the old tax system, then you can get tax exemption through tax saving schemes. Through our report, you can find similar tax saving investment options where you can still invest.

1.Public Provident Fund (PPF):

PPF is considered the best option when it comes to tax saving. You can open PPF through any bank or post office. Also, you can get tax rebate on an investment of Rs 1.5 lakh annually. The central government keeps making changes in the interest of PPF every quarter on the basis of inflation rate. Keep in mind that if you take a PPF account in the name of your spouse or children, you get tax rebate, but according to the provision there is no tax exemption in the name of parents, siblings, friends. The most important thing about a PPF account is that there is no tax on the amount and interest on maturity. A person can invest up to Rs 1.5 lakh every year in a PPF account for 15 years and can get tax exemption under Section 80C of Income Tax. If someone has invested in PPF and it matures on March 2020 but you still want to continue it, then you have till 30 June. At present, if you talk about the interest rate, you will get 7.1 percent interest on the investment for the April-June quarter.

2.National Savings Certificate (NSC):

The ASC scheme opened in the post office is considered a fixed income investment option. If you want to invest before June 30 for small savings then NSC is a better option. Taxpayers can avail of interest more than the interest on FD opened in the bank. NSC can be opened for 3 to 5 years. Also, tax exemption is also available under section 80c of income tax. At the same time, the interest is decided quarterly quarterly by the government. Currently, if you talk about interest, then you can take advantage of this scheme at 6.8 percent interest. Keep in mind that whatever amount or income is received after the account matures is taxed.

3.Equity Linked Savings Scheme (ELSS):

Under ELSS, you can invest money for a three-year lock-in. Investing in ELSS means that your money is invested in the stock market through mutual funds. Talking of funds, large cap, mid cap, small cap stocks are invested through ELSS. After three years, you get whatever returns you get against market fluctuations. You get tax exemption under section 80c of income tax. Experts consider ELSS to be a very good option for tax savings. Before taking any ELSS, please check the rating given to the company by the broker house or rating agency. Also, it is mandatory to check the performance and fundamentals of the company for 5 years.

4.National Pension System (NPS):

NPS is a good tax-deductible investment option as a pension. The account can be opened under section 80CCD (1) of section 80CCD to avail tax rebate. For government and private employees, the Pension Fund Regulatory and Development Authority (PFRDA) with the government is an investment option to get tax exemption. NPS can be availed by a person aged 18 to 60 years. NPS can be opened by going to any nearest bank branch. A salaried person can avail a tax rebate of up to Rs 1.5 lakh by depositing up to 10 per cent of his salary and up to 20 per cent of his total income. The NPS consists of three funds which include corporate funds, equity funds and government securities through which subscribers can invest. If a taxpayer has taken tax exemption by investing up to Rs 1.5 lakh under 80C, then under Section 80CCD (1B) can claim tax exemption by investing separately in NPS of Rs 50,000. Remember that there are some conditions of NPS also. Accounts Tier1 and Tier II are two types of accounts. In which there is a Tier I retirement account which is mandatory for every government employee to open. At the same time, Tier II is a voluntary account which any salaried employee can open as an investment and withdraw money at any time.

5.Tax Saving Fixed Deposit (FD):

FD can be opened in any bank. By investing in FD, you can avail tax exemption up to Rs 1.5 lakh under section 80C of income tax. The FD account is opened with a lock-in of five years, which can be extended later if the account holder wishes to. Talking about interest rate, by investing in FD you get interest ranging from 6.6% to 7.5%. Although FD interest is also taxed, FD is considered a safe option to get tax rebate.

There is also an option to get tax rebate of up to Rs 1.5 lakh on investment under Section 80C of Income Tax, one of which includes Sukanya Samriddhi Scheme, Term Insurance, Atal Pension Yojana, Unit Linked Insurance Plan. You can invest in any of these options before June 30 to get income tax exemption. Generally, the lock-in time is fixed in tax saving schemes under 80C and for a minimum of 3 years. Have to be invested. Before any tax investment, make sure to know the tax expert or investment advisor.

This post was published on June 24, 2020 8:26 pm

Content Team

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