Tax Saving Plans

tax saving plans

Tax Saving Plans:

Tax Saving Investments are an essential part of everyone’s life. These tax saving investments offer a deduction in tax under Section 80C or Section 80CCC under the Income Tax Act.

Though due to its importance people wish to invest in these tax saving investment avenues they often are skeptical in investing due to the risk associated with different investment avenues.

For a smart investor it is essential to start investing in the tax saving investment avenues before the tax paying season starts. In India, the tax paying season starts from 1st April for both: salaried and business class taxpayers.

An investment in tax saving avenues not only helps in exempting tax but also help you in earning a tax-free return.

Though most of the people in India neglect investing in tax saving investment instruments, a smart investor is the one who invests in such avenues way before than others.

When choosing the tax saving investment avenues for yourself, it is important to pay attention to three main factors:

  • Liquidity
  • Returns
  • Safety

What is Section 80C of the Income Tax Act?

Most of the tax saving investment plans in India are exempted from tax under Section 80C of the Income Tax Act. All the investment avenues that are eligible for tax exemption under this section are eligible for an exemption of up to a maximum limit of Rs. 1.5 Lakh.

Various Tax saving investment avenues under this section are:

  • Fixed Deposits
  • Life Insurance
  • Public Provident Fund
  • ELSS (Equity Linked Saving Schemes)
  • National Saving Schemes
  • Bonds

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