Top 7 best Tax saving investment
Does the salary of the last 3 months of the financial year go towards paying taxes? Do you invest but you do not get tax exemption? Do Financial Advisors Charge You Fees For Telling You Tax Savings Tips? If you too are getting troubled while paying tax for years, then definitely read this article.
I will tell you where to invest so that you can earn good interest on that investment along with Tax Savings. You can earn good profits by investing there yourself without paying any fees.
How much can we invest in Tax Savings Investment?
We can invest as much as we want in Tax Savings Investment. There are restrictions up to 1.5 lakh in some schemes. But we will get the exemption only on investing up to two lakhs.
Tax Savings Investment is divided into two parts in the Income Tax Act 80C and 80CCD(1b). By the way, there are many Acts in the Income Tax Act. I will not put you in the midst of this law. I will tell in very simple language which is of your use.
First of all, let me talk about 80CCD(1b). In this, if you want to get a tax exemption of 50,000, then you can get this exemption by depositing ₹ 50,000 in NPS. Although you can deposit any amount in NPS, tax exemption will be available only up to ₹ 50,000.
How Much Money Can One Save Through Tax Savings Investment?
First of all, it will definitely come to your mind that how much money can be saved by Tax Savings Investment or how much profit we will get on this investment. You can earn around 40% profit on Tax Savings Investment. 40% profit absolutely lies. Never even heard this thing till today. I tell with proof.
If your annual income is 12 Lakh. As you know, 30% tax has to be paid on income above 10 lakhs. That is, 12 Lakh – 10 Lakh = 30% of 2 Lakh = 60,000. You will have to pay 60,000 tax.
If you deposit 1.5 Lakh in 2 Lakh in ELSS Mutual Fund and 50 thousand in NPS, then you will get more than 10% return, which I will tell further, then your profit is 30% + 10% = 40%. 60000 you will save Tax and 10% of 2 Lakh = 20000 interest. Total profit 60 thousand + 20 thousand = 80 thousand. 40% of 2 Lakh = 80000. it became clear.
Various Alternatives to Tax Savings Investment
In tax Savings Investment, I am telling you various options to invest up to 1.5 lakhs under 80C, you can invest in whatever you like.
1. Tax Savings Mutual Funds –
In the previous article, I told you What is Mutual Funds? I have been told In Mutual Funds, investments are made in many types of funds. But not all investments get tax exemption.
Tax exemption is available only on Equity Linked Savings Scheme (ELSS) Mutual Funds. I believe it to be the best in all types of Tax Savings Investment under Section 80C.
There are two reasons for this. Firstly, the locking period in this is only 3 years. Whereas PPF has a lock-in period of 15 years, Insurance Policy 15 to 20 years, Sukanya Samriddhi (SSY) 21 years.
The second reason is that it gives the best returns. I am telling you the name of some ELSS funds which have given returns up to 18% from last 5 years whereas in other places only 5-7% returns.
2. Sukanya Samriddhi Account (SSA)
At present, all the deposit schemes of the Government of India get more interest than all of them. At present, the interest rate on Sukanya Samriddhi Yojana is 7.6%.
At present, all the deposit schemes of the Government of India get more interest than all of them. At present, the interest rate on Sukanya Samriddhi Yojana is 7.6%.
3. Public Provident Fund (PPF)
If you are afraid of taking risks in Mutual Funds and cannot open a Sukanya account, then this is the best option for you. You can take advantage of tax exemption by depositing a maximum of Rs 1.5 lakh in the PPF account.
 The second advantage in this is that the entire amount received on the completion of this account is tax-free.
4. Fixed Deposit (FD)
You can also do Tax Savings on 5 Years Bank FD. You can get this FD done in a bank or Indian post office. This money cannot be withdrawn before 5 years. Currently, the interest rate in this is 7.4%. The negative factor in this is that we have to pay tax on the amount received at the end of the accounting period.
5. Term Life Insurance
What is
Term Life Insurance? First, read this article then you invest in it. The best way of life insurance is Term Plan Life Insurance. By which we can secure our family financially. We can also take tax exemption on the premium paid in this.
6. Traditional Life Insurance
You must have taken 1-2 conventional life insurance. It also gets tax exemption. You can get income tax exemption every year on the premium paid in this.
7. ULIP (Unit Linked Insurance Policy)
ULIP is such an investment plan in which some money of our investment is invested in insurance and some money is invested. It is a combination of insurance and investment. On this also we get tax exemption.
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In this way, we have told you a total of 8 options, which you can take which is fit for you. Take whatever you want according to you. Because as I have mentioned above that you can earn up to 40% profit by doing this, which will be very beneficial for you.
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Thank you.
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