The article talks about certain tax-saving options that taxpayers should invest in at the beginning of the financial year i.e. in the month of April. These do not require large fund outlays and at the same time give you high tax benefits. Such schemes include Public Provident Fund, Term Deposits, Life Insurance Premium, Medical or Health Insurance, Equity Linked Savings Scheme (ELSS), Tax-Free Bonds and New Pension Scheme.
The benefit of investing in Public Provident Fund is that it gives you a good rate of return and is the best option for saving for retirement. PPF comes under the EEE (exempt-exempt-exempt) taxation regime. Every year you can invest up to Rs. 1.5 lakh. But, the lock-in period is 15 years. You can take a loan against PPF account.
Term deposits have a lock in period of minimum 5 years. Here, you will get guaranteed returns on maturity. These include deposits such as National Saving Certificates and other term deposits with scheduled bank or the post office.
If you want guaranteed return, you can also go for Life Insurance. You can avail tax exemption on the premium payments u/s 80C.
Investing in Medical Insurance has many benefits. But, to avail these benefits, you will have to make the payments for the premiums by cheque or card. If you make cash payments then, you will not be eligible for the tax benefits.
The article further discusses the other above mentioned investment schemes. Apart from these plans, the news article suggests other deductions available to individuals. Hence, you should be aware of such deductions.
The original article was written by Vaibhav Sankla, our Managing Director, H&R Block India. The write up has appeared as an authored article in Money Control. You can follow the below link,
Source : Money Control