Individuals seek methods to reduce their income taxes. The illegal income tax savings would be drawn into the light. But the national government gives various ways to diminish taxes. All are counted under statutory compliance and are available for every assessee.
The Income Tax Act of 1962 comprises various procedures which permit assessees to diminish their tax load. Various programs are being sponsored by the nation’s government to permit you to invest and obtain exemptions on income tax.
Income tax section 80C is a popular tax-saving option for investors who wish to reduce their tax liability and for advantage. The tax-free instruments under this section are life insurance premiums, PPF contributions, five-year term deposits, ELSS schemes and many more. In this article, we explain the best investment schemes by the Indian government that help to reduce the Income tax burden such as Senior Citizen’s Savings, National Pension Schemes, and PF funds.
Sukanya Samriddhi Yojana (SSY)
For avoiding paying taxes Sukanya Samriddhi Yojana (SSY) investments could support you. The union government is concerned for the daughter with the same subject. Upon investment in the very scheme, the interest would be paid at a 7.6% rate. Under 80C the relief of tax was merely applied in the very scheme on the basis of the two daughters. But the government has modified the same. Rule said that there is a tax exemption for both conditions when the two twin daughters are born after one daughter.
Senior Citizens Savings Scheme (SCSS)
If you are retired or applied to voluntary retirement then you might want to acknowledge investing in the senior citizen’s savings scheme as a risk-free method to diminish your taxes. The same would be the method for long-term savings that the Indian government assists. The investors seek a 5-year maturity extension for another 3 years.
You could opt for premature withdrawal for 1 year post opening the account and the present rate of interest is 8.6%. A penalty of 1.5% of the deposit would be levied as a penalty when the account has been closed prior to the passage of 2 years. A TDS would be applied and interest shall be taxed when the interest exceeds 10,000 per year. Through the SCSS account, you insure a constant income after your retirement.
Read Also: Best Ways to Save Big Amount of Income Tax in India
Public Provident Fund (PPF)
At 7.1%, the interest is presently being paid to the Public Provident Fund (PPF). Under Section 80C of the Income Tax Act every year when you invest Rs 1.5 lakh in PPF then you could obtain a tax exemption. Government assurances directed that money invested in PPFs does not lose value.
National Pension System (NPS)
National Pension System manages and assists by the Pension Regulatory Fund Authority of India. The tax exemption would be there on the investments made in the National Pension Scheme (NPS), under section 80C of the Income Tax Act. You might invest up to Rs 1.5 lakh per year in the same along with another Rs 50,000 under section 80CCD (1B). Through investing in NPS you could take advantage of a total income tax exemption of Rs. 2 lakh.
