Best Tax Saving Investment Options- There are many such schemes running in the country in which investing money not only gives good returns but also gives tax exemption. To get tax exemption, you will have to file ITR using the old tax system.
New Delhi. It is very important to invest your hard-earned money in the right place. This is the reason why everyone is looking for such options in which they can get excellent returns. If you are an income tax payer then saving tax also becomes important for you. The New Year has started. In such a situation, it is very important for you also to start tax planning. While tax planning, you should consider such investment options which not only give you good returns but also have tax benefits. There are many such options available in the market.
You must know here that you can get tax benefit by investing in any scheme only if you adopt the old tax system and file income tax return. If you choose the new tax regime then you will not get tax benefits. So, let us know today about those five schemes in which by investing money you will not only earn good interest but will also get tax exemption.
Public Provident Fund (PPF)
Public Provident Fund (PPF) is the most popular savings scheme. This safe investment scheme not only gives excellent interest but also gives tax savings. Currently, the government is giving interest at the rate of 7.1 percent on the amount deposited in the PPF account. This is an EEE category scheme. This means that there is no tax on the amount deposited every year, the interest earned on this amount every year and the entire amount received at the time of maturity is tax free. A minimum of Rs 500 and a maximum of Rs 1,50,000 can be deposited in the PPF account every year.
National Pension System (NPS)
If you want to save tax, then you can invest money in National Pension System i.e. NPS. NPS is an option which gives excellent returns and helps in saving a lot of tax. It has also given an average annual return of more than 8 percent in the last 5 years. Tax exemption is available on investments made in this scheme under Section 80CCD (1), Section 80CCD (1B), and Section 80CCD (2) of the Income Tax Act, 1961. Under Section 80CCD (1B), you can be entitled to an annual tax deduction of Rs 50,000 by investing in NPS. This gives tax exemption of Rs 1,50,000 lakh under Section 80C.
Equity Linked Savings Scheme (ELSS)
Equity Linked Saving Scheme (ELSS) is also a much better option in terms of tax saving. These schemes have given an average return of more than 18 percent during the last 5 years. Its lock-in period is only 3 years, which is less than other tax saving options. In this, tax exemption is available under section 80C on investments up to Rs 1.5 lakh. Being in the category of equity fund, there is no tax on profits up to Rs 1 lakh in a year.
Unit Linked Insurance Plan (ULIP)
The average annual return of Unit Linked Insurance Plan (ULIP) for 5 years has been above 8 percent. The lock-in period of this scheme is 5 years. The returns received from ULIP and the amount received on maturity are completely tax free under section 10(10d). This benefit will be available only when the life coverage in ULIP plan is at least 10 times the annual premium. However, if the annual premium is more than Rs 2.5 lakh, you will have to pay tax on the returns also.
National savings certificate
National Savings Certificate i.e. NSC is also a scheme giving safe and guaranteed returns. Investment in NSC can be started with Rs 1000. You can invest any amount of money in this. Interest is being given on this at the rate of 7.7 percent. Investments made in NSC are also tax exempt under Section 80C of the Income Tax Act.
