Best Tax Saving Schemes: At the end of the financial year, everyone is trying to save tax. If you are also looking for investment options with good returns along with saving tax at this time, then this article is for you. Here we will discuss some special options through which you can not only save tax but also earn good profits.
Choosing the right investment option
Who doesn’t like to save tax? But for this, you must choose the right investment option according to your needs and financial goals. To save tax, you can invest in options like the Equity Linked Savings Scheme (ELSS), Public Provident Fund (PPF), Tax Saver FD, National Pension System (NPS), Senior Citizen Savings Scheme (SCSS), and Sukanya Samriddhi Yojana (SSY). These schemes give you tax exemption as well as good returns.
Equity Linked Savings Scheme
First of all, let’s talk about ELSS funds. By investing in these, you can get a deduction of up to Rs 1.5 lakh under Section 80C of the Income Tax Act. The lock-in period of these funds is three years and they give you very good returns. You can invest in it with an initial amount of Rs 500 and there is no maximum limit.
National Pension System
NPS not only helps in saving tax but also gives you good returns. Apart from this, you can also plan your retirement through this scheme. If you keep investing in it till the age of 60, then you can withdraw a part of the amount and get the rest as a pension every month. Under Section 80CCD (1B), an additional deduction of Rs 50,000 is available on investment in NPS, which is apart from the exemption of Rs 1.5 lakh of Section 80C.
Unit Linked Insurance Plan
If you do not have insurance, then the Unit Linked Insurance Plan is the right option to save tax. Along with this, you also get better returns from this scheme. The lock-in period of this scheme is 5 years. The best thing is that investment, return, and withdrawal under the ULIP scheme, everything is tax-free. If you keep investing for 5 years, you can get a maximum exemption of Rs 1.5 lakh under section 80C.
Senior Citizen Savings Scheme
As the name suggests, this scheme is a special scheme designed for senior citizens. Under SCSS, you get an interest of 8.2% per annum. If you invest in it, then tax exemption is available under section 80C. You can invest a maximum of Rs 30 lakh in this scheme.
Tax Saver Bank FD
Apart from this, you can invest in Tax Saver Bank FD with a lock-in period of five years, which can help you save tax. The investment made in this gets a deduction of Rs 1.5 lakh under section 80C of the Income Tax Act. Let us tell you that money cannot be withdrawn from this FD during the lock-in period.
Public Provident Fund
Public Provident Fund i.e. PPF is also one of these schemes. You can also save tax by investing in it. The investment made in this scheme is tax-free under section 80C. Not only this, but its interest and maturity amount are also tax-free.
Sukanya Samriddhi Yojana
This scheme has been started for the future of daughters, in which up to Rs 1.5 lakh exemption is available under section 80C. Also, the return received on it is tax-free. Under this scheme, you can invest by opening an account for a girl child below 10 years of age.