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You can further improve your financial portfolio while saving money during the tax saving season. Under Income Tax Return (ITR) you can claim deduction by investing in tax saving schemes till 31st March 2023. In such a situation if you are also looking for some options to save tax then know about the popular schemes below…
Income Tax: An annual income of 12 lakhs, still no income tax is payable; Read how
Public Provident Fund (PPF)
PPF is a long term investment option. This scheme currently earns interest at the rate of 7.1 percent and you can also claim tax benefits. Under Section 80C of the Income Tax Act, you can get tax exemption if you invest Rs 1.5 lakh annually in PPF. The government guarantees the investment in PPF so that you will not incur any financial loss.
Equity-Linked Savings Scheme (ELSS)
ELSS is a type of mutual fund, which mainly invests in equity shares of companies. The scheme has a lock-in period of 3 years and the option of tax deduction under Section 80C of the Income Tax Act is also available. You can invest a minimum of Rs 1.5 lakh in ELSS in a financial year.
Tax Saving Tips: Effective ways to save tax before Budget 2023, use this formula
Life insurance policy
You can claim tax deduction under 80C if you buy a life insurance policy. The maximum investment limit in a life insurance policy in a financial year is Rs.
National Pension System (NPS)
If you also invest in the National Pension System, you are eligible for tax exemption under Section 80C of the Income Tax Act. 1.5 lakh per annum and additional Rs. 50 thousand can be invested in this scheme under Section 80CCD (1B). By investing in NPS you can get a total discount of Rs 2 lakh.
An annual income of 10 lakhs still does not have to pay income tax of even 1 rupee, quickly see how it is
Health insurance
Due to the covid infection, health insurance has become important for everyone. The advantage of health insurance is that you can save tax on it. Buying your own health insurance along with your family can save you taxes. Under Section 80D of the Income Tax Act, you can claim a deduction of up to Rs 25,000 for health insurance premium paid for yourself along with your spouse and children. On the other hand, buying health insurance for your parents will save you an additional Rs 50,000.
home loan
Even if you have taken a home loan, you still get income tax relief. If you have taken out a home loan, you can claim a deduction for the principal payment up to Rs 1.5 lakh under Income Tax Section 80C. Apart from this, an additional tax relief of up to Rs 2 lakh is also available under Section 24B on interest paid on home loan. That means a total tax benefit of Rs 3.5 lakh can be availed.
