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Want to urgently save on taxes? Here are some options

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Want to urgently save on taxes? Here are some options

With March 31st on the anvil, many people are urgently looking for tax saving avenues. Here are some of the options that can be considered in this regard-

  • ELSS- This helps you get maximum tax savings although there are market linked risks for the money. Investments can be executed through SIPs and they have lock-in periods of 3 years on an average. The returns can be as high as 12-15% and there are tax benefits under Section 80C.
  • PPF- PPF is always a favored investment for saving on taxes. This is a long-term investment option and comes with tax deductions under Section 80C up to a maximum of Rs. 1.5 lakh. PPFs come with 15 years as lock-in periods which can be increased by 5 years. The current interest rates stand at 7.6% annually.
  • EPF- EPF contributions also help people when it comes to saving on taxes. These contributions are eligible for tax deductions under Section 80C up to a maximum of Rs. 1.5 lakh.
  • Tax Saver FDs- Tax saver FDs usually have lock-in periods of 5 years. There are tax benefits under Section 80C up to Rs. 1.5 lakh. The interest ranges between 6.5-8.7% depending on the financial institution in question. The interest, however, is taxable.
  • SSY- Investments in Sukanya Samriddhi Yojana come with tax benefits up to Rs. 1.5 lakh under Section 80C and interest rates are 8.1 per annum. This aims at tackling issues of girls with regard to getting education. Guardians or parents can open this account with the post office or bank which they can continue building in order to create a corpus for their daughter.
  • Home Loans- If you have been thinking of buying a home, you can consider opting for a home loan in order to get tax benefits. There are benefits up to Rs. 1.5 lakh under Section 80C on the principal repayment annually along with deductions on interest repayment up to Rs. 2 lakh under Section 24. There are benefits for first-time homebuyers and you can also get benefits under PMAY.
  • Insurance Coverage- You can save on taxes under Section 80C by purchasing life insurance coverage for yourself, your children and spouse. The premium paid will be eligible for tax deductions.
  • Health Insurance- This will have tax benefits on the premium paid under Section 80D. This can be claimed up to Rs. 25, 000 in case the person insured is lower than the age of 60. In case you are buying health insurance for your parents or any other senior citizen, the premium will be deductible from taxes up to Rs. 30, 000. The maximum tax benefit is Rs. 55, 000 if your age is lower than 60 while the age of your parents is more than 60.

 

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