Several tax-saving schemes available in India can benefit you in various ways. From insurance plans that help you save on health expenses to loan repayment schemes that can provide tax savings, there is something for everyone on this list. Read on to learn more.
Unit Linked Insurance Plan (ULIP)
Unit-linked insurance plans (ULIPs) are a tax-saving investment option. They protect you and your family from issues caused due to significant accidents or health problems. They are insurance plans linked to a particular investment. The premiums you pay are based on the return on that investment. This means you can choose the policy that best suits your needs and budget. There is no need to qualify for a particular plan.
All you need is enough money saved up to cover the premiums. ULIPs are flexible, so you can choose the best policy that fits your needs. In addition, ULIPs are tax-saving options. This means you don’t need to pay income tax on your premiums.
ELSS Mutual Funds
There are some excellent income tax saving schemes available in India. One of the most popular options is ELSS. ELSS stands for equity-linked savings scheme. These mutual funds offer tax savings and investment exposure to Indian stocks and bonds. There are several different types of ELSS mutual funds available. So choosing the one that best suits your financial needs is essential.
Many of these funds offer instant tax deductions for investments up to Rs. 1.50 lakhs in a year. So you can start saving immediately. Make sure to consult with a Registered Financial Advisor (RFA) before investing in an ELSS Mutual Fund. They will be able to help you make the most informed decision for your specific situation. In the long run, ELSS mutual funds can offer you a healthy return on your investment while also helping you save on your taxes.
Public Provident Fund (PPF)
If you’re looking for a tax saving investment scheme, the public provident fund (PPF) is a great option. A public provident fund is a savings account that allows you to save on your taxes and earn interest on your money. The government provides a fixed interest per annum for this scheme. The interest is usually high compared to other banks and savings accounts.
Additionally, you can use the PPF for insurance purposes or to purchase assets such as mutual funds or stocks. There are several benefits to opening a PPF account. So it’s worth considering if you’re looking for an income-generating scheme.
Sukanya Samridhi Yojana (SSY)
The tax season is almost here, so it’s time to start thinking about income tax savings schemes. One of the best options for low-income families is the Sukanya Samridhi Yojana (SSY). SSY helps families save money on their income tax bill, and the benefits are maximum for those living in rural or semi-rural areas.
Eligible families can receive up to Rs 4,000 per month in savings, which can help reduce their tax burden. Other schemes like the Pradhan Mantri Jan Dhan Yojana (PMJDY) and the Rupay Card Scheme for Urban Residents offer similar opportunities. Make sure you research all available options and choose the best income tax savings scheme for your financial situation.
National Savings Certificate
The National Savings Certificate (NSCC) is a government tax savings scheme. It offers tax-free interest and a minimum deposit of Rs 10,000. NSCC certificates can be used to purchase items like cars and property, making them versatile investment vehicles. You can also get some interest in your savings account. This makes it a good option for retirement planning. Plus, there’s no need to open an account in person. You can do it online easily.
Tax-savings fixed deposit
When it comes to income tax saving schemes, a fixed deposit is always a good option. Many types of fixed deposits are available, with interest rates usually meagre. This makes them a great investment for beginners and long-term investors. You can also take advantage of tax rebates and bonuses to increase your return.
Senior Citizen Savings Scheme
The senior citizen savings scheme (SCSS) is a great way to save for your future. The program offers high-interest rates on deposits made into designated accounts. Thereby encouraging people of all ages to get involved. Your funds are FDIC-insured, so you can be sure they’re safe and will earn you good returns. In addition, you don’t have to be a resident of India to participate – anyone over 60 years of age can join.
Repayment of an education loan
If you’re one of the many Indians who have an education loan, it’s time to get organized and start repayment. Several options are available, depending on your financial situation and repayment plans. You can repay the loan over time through various methods, like monthly payments or lump sums. Remember that repaying your education loan is a process that takes some time, but it’s definitely worth it in the long run.
Interest paid on home loan
There are many tax-saving schemes available in India that can help you save tax on your income. The Interest Paid on Home Loan (IPH) limit is an important option. As per Section 24 of the Income Tax Act, 1961, you can claim an income tax deduction of up to Rs. 2 lakhs against the interest paid on your home loan every year.
Health Insurance premium under section 80D
If you’re in the tax bracket of 10-15%, health insurance premiums can amount to a hefty sum of your income. But fret not. Under section 80D of the Income Tax Act, you can deduct your health insurance premium from your taxable income. This allows you to reduce the tax you owe each year. The maximum deduction you can claim is Rs 2 lakhs per year. Additionally, you must file a Form 15G if you claim this deduction – it’s free and easy to do online.
It would help if you understood all the tax saving schemes correctly. These tax-saving investments can be efficient sources for saving a significant sum of money. If you need clarification about the tax-saving plans, you may reach out to professionals at Piramal Finance. With a team of experts, they can assist you with all types of financial advice, thereby helping you in the long run.