You must pay income tax if you work and your pay is subject to a tax bracket. An individual who earns less than Rs 2.5 lakh annually are exempted from paying tax under the existing tax bracket. At the same time, tax is due on earnings above this amount. If working person invests their money wisely, they can take advantage of tax-saving tips, according to income tax. There are numerous schemes whereby investors can participate today and receive tax benefits and higher profits in future.
Here's a list of a few schemes that will help you in saving money from tax:
1. Senior Citizen Savings Scheme (SCSS)
You can invest in the post office's Senior Citizen Savings Scheme to reduce your tax burden if you are retired and your pension falls under a tax bracket. Senior citizens are the target audience for this scheme. Anyone over 60 who is retired is eligible to invest in this plan. Under this scheme, you are eligible for an income tax exemption of Rs. 1.5 lakh under Section 80C. You can earn a return of up to 7.6 per cent with this strategy. Additionally, you can invest in this scheme from Rs 1,000 to Rs 15 lakh.
2. Public Provident Fund (PPF)
Nowadays, public provident funds have become a highly well-liked investment strategy. You can open an account under this scheme at any bank or post office. You can invest yearly amounts ranging from Rs. 500 to Rs. 1.5 lakh in this scheme. You earn a 7.1 per cent compounding return on this investment. This tax-saving plan entitles you to a section 80C income tax exemption of up to Rs. 1.5 lakh. For 15 years, you can invest money in this plan.
Also read: PMVVY Scheme: Benefits of this government pension scheme available until March 2023, know about policy
3. Sukanya Samriddhi Yojana (SSY)
A government scheme called Sukanya Samriddhi Yojana allows you to make investments for your girl child up to the age of ten. This policy was created specifically for girls by the government. You may invest every year between Rs. 250 and Rs. 1.50 lakh under this scheme. On the amount deposited, the government offers a 7.6 per cent interest rate. Section 80C of the tax code also offers an exemption in addition to this. On the other hand, the girl kid may withdraw some of the money after turning 18, and she may remove all of it after turning 21.
4. National Pension Scheme (NPS)
The National Pension Scheme was likewise created with retirement in mind. Tax exemption is an advantage of investing in this plan. In this case, Section 80C of the Income Tax provides a 1.5 lakh rupee rebate. You also receive an additional exemption under 80CCD (1B) of Rs. 50,000. You are eligible for a maximum reduction of Rs 2 lakh under this scheme in such a scenario.
5. Tax Saving Fixed Deposit Scheme
You can invest in the Bank's Tax Saving Fixed Deposit Scheme if you wish to make bank FD (Tax Saving FD) investments and want to benefit from tax exemption as well. You are excluded from paying income tax under section 80C by investing in this scheme. Your money is locked up for 5 years in this. You receive returns from this in accordance with the bank's FD rates.
