Tax Saving Investments
Taxes saving investment plans are a great way of achieving financial goals. There are a plethora of Investment schemes available in the market that provides tax exemption and deductions. You can choose from many tax-saving mutual funds to claim tax exemptions or tax deductions under section 80c or section 80ccc.
There are some investment avenues that provide a further tax deduction. Let’s have a look at the best tax-saving investments under section 80C of the IT Act.
Best Tax-Saving Investments under Section 80C
Equity-Linked Saving Scheme
National Pension Scheme
Unit Linked Insurance Plan
Public Provident Fund
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How to Plan the Tax-saving Investments?
The best time to plan the tax-saving investments is at the beginning of the financial year. Because the investments can multiply over a long-term period and can help the individual to fulfill their goals. The tax-payers can follow these pointers to plan the tax saving for the year:
- Check your tax-saving expenses which pre-exist like insurance premium, the contribution in EPF account, children’s tuition fees, home loan repayment, and many more.
- If tax-saving expenses cover up to Rs.1.5 lakh then you don’t need to invest the entire amount.
- Choose tax-saving investments like PPF, Bank FDs, and ELSS funds.
Payment Applicable for Tax Saving Deduction U/S 80C
- Life Insurance Premium Payments
- Children’s Tuition Fees Payments
- Home Loan Repayment
Frequently Asked Questions
Here are some methods to reduce your taxable income:
- Claim deductible expenses
- Donate to charity
- Create a mortgage offset account
- Delay receiving income
- Hold investments in a discretionary family trust
- Pre-pay expenses
- Invest in an investment bond
Section 80C is the most preferred section where one can save tax by investing or spending a maximum of Rs 1.5 lakh in a specified financial year.