Income Tax 2023: Public Provident Fund, Fixed Deposit, Insurance can help you save tax, here's how

Every salaried person is responsible for paying taxes that are imposed on income. Taxes take a large portion of your hard-earned money. However, the government offers advantages in the form of tax deductions on specific investment strategies that can be used to reduce taxes.

Here is a list of tax-saving investment choices and strategies that can aid people in maximising their tax benefits:

Public Provident fund:
One of the widely used investment choices for tax savings is the public provident scheme. To begin using long-term savings and investment products, you must first open a PPF account at the post office or specified branches of public and private sector banks. Contributions to the PPF account earn a guaranteed rate of interest. Section 80C deductions of up to Rs 1.5 lakh per fiscal year are allowed for these deposits. 

Fixed Deposit:

According to section 80C of the Indian Income Tax Act, 1961, you can lower your tax obligation by investing in tax-saving fixed deposits. You can deduct up to Rs. 1.5 lakh from your income by investing in tax-saving fixed deposits. These FDs have a lock-in term of five years, and the interest earned is taxed. Interest rates typically range from 5.5% to 7.75%.

Senior citizen savings scheme:

Anyone above age 60 can save money under the government-sponsored Senior Citizen Savings Scheme (SCSS). It generates reasonably high returns and offers a dependable and consistent source of income for people's post-retirement years. Tax deductions are allowed for main deposits made into SCSS accounts up to a total of Rs. 1.5 lakh under Section 80C of the Income Tax Act of 1961. However, under the existing tax code, this exception is the only one that applies.

Life Insurance:
Life insurance is a crucial component of a person's financial plan since it provides protection to the person's family in the event of an untimely death. Life insurance, be it traditional (endowment) or market-linked (ULIP), offers tax benefits to policyholders on the premiums paid. There are several insurance plans to look after that can help you save tax. 

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