While planning for financials, one hindrance that comes to effective management of funds and budgets is income tax. The government takes a particular percentage in the form of IT from businesses and individuals who come under the tax slot. For instance, if you come under the tax slab of 6 lakh per annum, you have to give a part of your salary in the form of tax to the government. So, it become very imperative to know about taxes and their implications in this age of 2024.
If you want to invest your money somewhere by avoiding taxes, there are some tips and best options that we are mentioning here:
What is Tax Saving Investment? Know Here
The investment plans which doesn’t have any type of tax to submit to the government or any other financial institution are called tax-saving investments. There are various options, and tips you can follow in order to get a better option in saving your taxes. If you come under a tax slab according to the new tax regime, you should know how much amount you have to spend in taxes. This tax-saving option helps to promote financial stability for all sorts of people.
Top Tax-Saving Investment Plans
Know the top tax-saving investment plans:
PPF or Public Provident Fund
PPF is one of the best options for investment purposes especially if you want to stay away from giving taxes to the government. With this investment plan, your investment will be locked for about fifteen years from the initial date of your application. Public Provident Fund provides higher returns with 7 to 8% annually on the total amount you have invested.
Invest in the ELSS Fund
Equity Linked Saving Scheme is a type of investment option that provides good returns to the individual. Equity-linked savings schemes are a kind of fund that invests about 80% of the deposited amount in several types of equities. It helps the investors to get genuine and reasonable returns and also helps save on Income taxes. It provides a lock period of your investment during which you can’t withdraw any type of fund, but you can easily add more and more as per your desire for the investment purpose.
You can easily claim tax exemptions if you invest a large amount like 1.5 lakhs. These investment plans provide several types of benefits to the users.
NPS or National Pension Scheme
Private sector employees don’t get the benefits of a pension just like government employees. Then, NPS comes to the game with a high-return investment option. The National Pension Scheme is a government-backed scheme of financial assistance that provides good returns on investment plans. It provides fixed and guaranteed returns which vary from 9 to 12 percent. This option of investment will help you get the benefits of tax exemptions.
Fixed Deposits (Tax-Savings)
It’s one of the easiest and most simplified tax-exempt investment plans which are run by various banks and financial institutions. You can easily open your account for fixed deposits and with any registered bank. However, the returns of this investment plan are slightly lower than other investment options but you will get reasonable returns with many flexibilities.
Sukanya Samridhi Yojana
It’s another government-run scheme which is for baby girls. You can open this account in the name of your daughter. She can withdraw her amount by attaining the age of 18 or when needs the funds. This investment plan is getting very popular these days among netizens as it provides tax-saving benefits for your daughter. It enables the common man to get empowered with a maximum of 1.5 lakh every year. You should read the complete guidelines associated with this scheme.
Summary
There are several types of tax-saving government-backed banks that run schemes for investment purposes. Individuals can invest their hard-earned money into a genuine investment plan like fixed deposits, equity plan, SIPS, National Pension Scheme, or Sukanya Samrishi Yojana etc. These schemes provide better ROI and help to save on taxes posed by the Income Tax department of the government of India.
