For all the self employed, working or any other professional, the biggest threat and fear is to pay exorbitant income tax. People are always looking for investment options that can minimize their tax liabilities. The options are such that if you are out to survey the market, it may confuse you. Here is a list of some popular tax saving options, which you may find useful.
PPF is one of the most popular schemes for a long time and the latest budget has made it all the more attractive by exceeding the annual investment limit to Rs 1.5 lakhs. You can invest this amount either in one go or in installments but make sure that you invest atleast Rs 500 every year in order to avoid that nominal but hateful penalty of Rs 50. No one likes penalties, do you?
Equity linked saving scheme (ELSS)
ELSS has the shortest lock-in period of three years amongst all the tax saving instruments under section 80C. This scheme is extremely good and profitable in the long run for investors and you can invest as little as Rs 500. It is better to invest small amounts on regular intervals rather than one big amount, and to make it even more flexible, you do not have to continue your investment for a long time under this scheme. Feel free to discontinue and start again when you wish to.
ULIP is very customer friendly and has been seen as really profitable for investors in the long run, let’s say, a period of 10-12 years. There are no other charges except the “risk cover” charged by the banks. It is quite popular and dependable nowadays. Haven’t you heard your friends talking about this one?
New Pension Scheme
Affordable structure, flexibility to fit any budget and lifestyle and other friendly features make this pension plan a favorite among investors looking for a stable retirement plan. You can choose as small as Rs 500 to bigger amounts and on the charts of flexibility, this scheme ranks quite high.
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This one has emerged as the best tax saving plan for senior citizens. The rate of interest is 100 basis points above the 5 year govt. bond returns. All the interest is paid on 31 March, 30 June, 30 September, and 31 December irrespective of your time of investment. The only glitch is the upper limit of Rs 15 lakhs, however, keeping in mind other benefits, safety, and returns, this issue looks small. This limit is not that small too!
When you earn returns on your investments or get a fat salary, letting all that money go to pay taxes is one of the biggest pains that is felt. Looking for ways to save taxes and make good investments simultaneously, so think about this one and share it with your pals. Friends share right!