We’re all interested in learning how to reduce our tax burden, or more specifically, how to organize our investments. Tax planning is important, but so are tax-saving strategies. You may save money and make money with the greatest tax saving plans in India.
Keep in mind that there should be more of a purpose than just tax savings while thinking about how to save tax in India. The objective must be to invest in the most advantageous investment opportunity while simultaneously reducing tax liabilities.
We have identified the top 10 tax-saving schemes in this article.
Pension plans are tax-advantaged investments that provide a set lifetime income during retirement. Section 80CCC of the Income Tax Act of 1961 permits a tax deduction of up to 1.5 lahks every year on the premiums paid for these schemes.
2-Certificate of National Savings
The Government of India supports the fixed-income savings programme known as National Savings Certificate. It is suitable for organizations with low to moderate incomes. The plan offers a taxdeduction of up to 1.5 lakh per year under the provisions of Section 80C of the Income Tax Act of 1961.
3-Employee provident fund
A well-known savings programme called the Employees’ Provident Fund, or EPF, was created by the EPF and is governed by the Indian government. The savings programme is designed to encourage the salaried class to save money in order to create a sizable retirement corpus.
4– Plans for unit-linked insurance (ULIP)
Unit Linked investing Plans (ULIPs), which offer both investing and insurance in bonds and stocks, are most suitable for people who have long-term financial planning. It accomplishes the objectives of wealth growth and life insurance and offers a regular premium payment option.
5-Payment of a student loan
When a loan is repaid, the Income Tax Act offers a tax benefit in the form of a tax deduction under section 80E of the Act. It’s crucial to keep in mind that the loan borrower has access to this tax reduction choice.
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6-Medical costs for a handicapped dependent
Under the terms of section 80DD, a taxpayer may deduct medical costs for dependents who are disabled. This tax advantage will assist the individual who is caring for a dependent handicapped family member in lowering their tax obligation.
7-Donations made to charitable organizations:
Under Section 80G, the taxpayer is entitled to a tax deduction for any money contributed to a recognised charity. Donations to these groups should be sent through check or online transfer. Cash transfers worth more than Rs 2,000 are not deductible under this provision.
8-Mutual Fund ELSS
Mutual fund investment plans known as ELSS Mutual Funds equities Linked Savings Schemes spend a significant portion of their portfolio in equities. The statutory lock-in period for the fund is also the lowest of all the investment products at 3 years.
9-Treatment of certain disorders as per Section 80DDB
If a taxpayer has developed a disease like cancer or a neurological disease like dementia, motor neuron disease, parkinson’s disease, etc.,they are eligible for a deduction under section 80DDB. Section 80DDB permits a deduction for the substantial costs associated with treating each of these conditions.
10-Older Adult Savings Programme
An income tax saving plan called an older Citizen Savings Scheme is accessible to older persons who live in India. The programme offers one of the highest returns among the numerous savings plans and is accessible for investment through banks and post offices.
Q1-What tax-saving solutions are available to elderly people in India?
Ans- One of the safest and most well-liked investing options for older folks is fixed deposits (FD) and recurring deposits (RD). The bank offers older individuals a larger interest rate on FDs and RDs than it does for younger people.
Q2-When may Indians save the most money on taxes?
Ans – Invest in tax saving strategies to reduce your taxes and earn income all year long. Plan for them as early as possible in the fiscal year so that you may take advantage of the greatest tax-saving investments before they begin providing you with excellent returns.