In India, there are several tax saving schemes available to individuals and businesses that can help reduce their tax burden. These schemes can provide significant savings, allowing individuals and businesses to keep more of their hard-earned money. Here are five tax saving schemes in India:
1. Public Provident Fund (PPF):
The PPF is a long-term savings scheme offered by the government of India. Contributions to the PPF are eligible for tax deductions under Section 80C of the Income Tax Act, up to a maximum of INR 1.5 lakh per year. The PPF also offers a fixed rate of interest, currently at 7.1 per cent per annum.
2. Employee Provident Fund (EPF):
The EPF is a savings scheme for salaried employees in India. Contributions to the EPF are eligible for tax deductions under Section 80C, up to a maximum of INR 1.5 lakh per year. Employers are also required to make matching contributions to the EPF.
3. Equity-Linked Savings Scheme (ELSS):
ELSS is a type of mutual fund that invests in equity and equity-related instruments. Investments in ELSS are eligible for tax deductions under Section 80C, up to a maximum of INR 1.5 lakh per year. ELSS funds have the potential for higher returns, but also carry higher risk.
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4. National Pension System (NPS):
The NPS is a pension scheme offered by the government of India. Contributions to the NPS are eligible for tax deductions under Section 80CCD (1), up to a maximum of 10 per cent of the individual's salary (including dearness allowance) or INR 1.5 lakh, whichever is lower.
5. Home Loan Interest:
Interest paid on home loans is eligible for tax deductions under Section 24, up to a maximum of INR 2 lakh per year. This can provide significant savings for individuals who are repaying a home loan.
Overall, these five tax saving schemes in India can provide significant savings for individuals and businesses. It's important to carefully consider the specific features and benefits of each scheme, as well as your own financial goals and risk tolerance, before making a decision.
