Tax Benefits Under Income Tax Act 80C on investment, interest income, LIC policies, fixed deposits, tax saver mutual funds, maturity cash on PPF, etc. The deadline is 31 March 2024. Taxpayers can save up to Rs. 1.50 lakh in a financial year.
As the financial year ends, taxpayers start thinking about ways to reduce their tax burden. While some have already made investments, reviewing these is important to ensure the necessary documents are provided for exemptions. It’s also worth considering if further investments can be made to reduce tax liabilities before the March 31 deadline.
One highly recommended tax-saving scheme is the Public Provident Fund (PPF) which offers triple tax benefits on investment, interest income, and maturity cash. Under Section 80C of the Income Tax Act, tax savings of up to Rs. 1.50 lakh can be made in a financial year.
Another option to consider is the Sukanya Samriddhi Scheme, which can also help reduce tax on returns. However, it’s important to note that the old tax system offers more flexibility than this scheme.
Equity-Based Saving Schemes (ELSS) are also worth exploring. While a large investment may be required initially, depositing small amounts every month is also possible. However, there is a risk of loss with equity schemes, so it’s important to select a good fund based on past returns and consult financial experts to get the best returns in the long run. Investing in SIP (Sequential Investment Scheme) is the best option among these schemes.
Other options to save tax include LIC policies, fixed deposits, tax saver mutual funds. Under Section 80C, the maximum tax savings in a financial year can be Rs. 1.50 lakhs. However, the National Pension System (NPS) is the best option for those looking to save more than that. Under Section 80CCD (1B), an additional Rs. 50,000 can also be saved on tax.
It’s important to note that health insurance policy premiums and home loan EMIs are also tax deductible. Don’t delay in reviewing your current investments and considering new ones before the March 31 deadline.
