Tax Saving Investments and Tips

Tax Saving
Tax Saving

It’s hard for everyone to cut a part of his/her income and pay it as income tax. Read on to find the top Tax Saving methods for you to apply in your life.

Tax Saving Investments and Tips

Sukanya Samriddhi Yojana:- The tax benefits available under this scheme are covered under section 80C. This is probably one of the best tax saving investment options available today. It offers a higher rate of return on investment when compared to PF & PPF. But, this scheme can be used only by the parents or guardians of a girl child. The account can be opened from the date of the birth of the girl child till she attains the age of 10 years.

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However, a depositor can operate only one account in the name of a particular one girl child. Besides, the legal guardian of a girl child is permitted to open maximum two accounts in the name of two different girl children. The third account in the name of the girl child can be opened in the case of the birth of twin girls, as second birth or if the first birth itself results in three girl children.

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Like most deductions under section 80C, the maximum limit for the tax-deductible amount for SSS is also Rs 1.5 lakh per annum. Any amount deposited over and above Rs 1.5 lakh is not considered for any tax rebate.

EPF :- If your employer has opened an EPF (Employee Provident Fund) account for you, then you are already investing in a very profitable investment option. The contribution that you make to your EPF or PF account can be claimed as a deduction under section 80C. The interest income & maturity amount that you get as a result is also exempt from tax if you have completed 5 years of work.

Tax Saving Investments and Tips

VPF :- VPF (Voluntary Provident Fund) earns you tax-free interest of 8.4%. Twelve percent of your basic salary goes to your EPF as a mandatory investment. However, you can choose to invest more (up to 100%) of your basic salary + DA through voluntary contributions. If you want to invest more, your EPF becomes your VPF. Therefore, you can boost your contributions in VPF to get the most out of your deductions under section 80C.

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PPF :- Besides the employee provident fund, you can also invest in PPF. It is a great way to invest if you are looking for a long-term investment. Similar to PF, you can get a tax deduction on your contributions while the resulting interest income and maturity amount remain exempt from tax.

Tax Saving Investments and Tips

NPS :- This saving scheme is offered by the postal department. It is considered as a very secure option with virtually nil risk. Your contribution to this scheme makes you eligible for section 80C deduction. Though the interest earned is taxable, it also qualifies for deduction under section 80C.


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