Keyword- tax saving investment
Taxation planning has become an important part of everyone’s financial planning. If you plan your taxes in awell-organized way then you will end up saving a good corpus for your future. We often keep hopping from one investment tool to another in a ray of hope of saving the tax. Nowadays,in the market, you will find a plethora of tax saving investment tools through which one can easily fill their pockets by saving tax.
To make it easy, here are four investment options to save tax.
A mutual fund is also a great option to choose for the purpose of saving tax. ELSS an equity-linked savings scheme is the most powerful investment tools to fulfill these needs. You can reap great benefits asit offers up to a limit of INR 1.5 Lakhs which is tax-free under Section 80 C of the Income Tax Act. On the other hand it also helps you in lowering your taxable income and the tax liabilities by investing your hard earned money. Even for that matter, equity mutual funds are also considered as one of the best tax saving mutual funds option which comes with a lock-in period of only one year.
Public Provident Fund
The public provident fund is often measured as one of the safest investment options which are tax-free. Anyone can open the account in the post office or in the bank. The principal amount can be fixed for fifteen years and will create compound interest. One can also extend the duration by five years.
Nowadays, there is a tremendous increase in taking up different loans. However, if you opt for the home loan, then you are eligible for tax benefits. The principal and the interest which is paid up to 1, 00,000 every year is acceptable to reap the tax benefits which come under section 80C and under section 24. The investor is also allowed to claim the deduction of interest up to RS 1.5 lakh. Even one can save tax upon education loan which also comes under the section 80E.
As said earlier that, these days you get many options in the tax-saving investment tool. Thus, investment in life insurance helps you in saving tax. Investment in ULIPs (Unit linked insurance plan) is considered as the best instrument for tax saving. The amount which you endow in ULIP is entitled to the tax deduction. The exemption is up to INR1, 50,000 and is allowed under the section 80C, 10(10D) and the section 80CCC in the financial year. The premiums which are paid by the policyholder can reap the tax benefits.
Tax saving is indeed a critical part of anyone’s financial planning. Everyone wants to save every penny they earn and these stated options provide an excellent way to save the tax deduction.