Best Tax Saving Instruments
Here are top 5 best tax saving investments: –
1. Public Provident Fund (PPF):
PPF has a long-term tenure of 15 years. The compounding interest and income tax exemption of Rs 1.5 lakh in PPF, makes it one of the best choices at present. Currently, PPF has a return of 7.1 % p.a.
2. Senior Citizen’s Saving Scheme (SCSS):
The best option for retirees, as only senior citizens, can invest in this scheme. SCSS can be started with any post office or a bank by anyone above 60 years of age. It comes with a five-year tenure, which can be extended by three years after maturity. Currently, SCSS offers 7.4 per cent interest per annum, payable quarterly and is fully taxable.
3. National pension scheme (NPS):
NPS is a long tenure retirement-savvy investment option managed by the Pension Fund Regulatory and Development Authority (PFRDA). It is a component made up of equity, fixed deposits, corporate bonds, liquid funds and government funds, etc. NPS is launched by government to save for the retirement. For opening NPS account please visit www.npscra.nsdl.co.in.
NPS gives returns approx. 9.5% p.a. (Source – www.valueresearchonline.com/nps/)
4. Invest in health insurance:
If you are relying on your corporate health insurance plan or do not have one at all, health insurance is one of the crucial investments you need to make right away. Right health insurance plans not only enable you to save tax under Section 80D of the Income Tax Act, but also provide you financial protection at time of hospitalisation. Section 80D allows you a deduction of up to Rs 25,000 for premiums paid and Rs 50,000 to people above the age of 60 years.
5. Don’t just limit yourself to Section 80C and 80D:
Your investments should not be limited to only the aforementioned sections. There are multiple lesser-known investment options that allow you to save on income tax. Under Section 80TTA, tax deduction benefit of up to Rs 10,000 is allowed on interests on your savings bank account.
Under Section 80TTB, tax deduction benefit of up to Rs 50,000 is allowed on interests on your savings bank /FD / RD account. Additionally, you may claim tax deduction benefits on expenses on medical treatment, donations made to NGOs or political parties, as well, under Section 80G, 80GGA, and 80GGC.
(Source: Taxguru) more
1. Public Provident Fund (PPF):
PPF has a long-term tenure of 15 years. The compounding interest and income tax exemption of Rs 1.5 lakh in PPF, makes it one of the best choices at present. Currently, PPF has a return of 7.1 % p.a.
2. Senior Citizen’s Saving Scheme (SCSS):
The best option for retirees, as only senior citizens, can invest in this scheme. SCSS can be started with any post office or a bank by anyone above 60 years of age. It comes with a five-year tenure, which can be extended by three years after maturity. Currently, SCSS offers 7.4 per cent interest per annum, payable quarterly and is fully taxable.
3. National pension scheme (NPS):
NPS is a long tenure retirement-savvy investment option managed by the Pension Fund Regulatory and Development Authority (PFRDA). It is a component made up of equity, fixed deposits, corporate bonds, liquid funds and government funds, etc. NPS is launched by government to save for the retirement. For opening NPS account please visit www.npscra.nsdl.co.in.
NPS gives returns approx. 9.5% p.a. (Source – www.valueresearchonline.com/nps/)
4. Invest in health insurance:
If you are relying on your corporate health insurance plan or do not have one at all, health insurance is one of the crucial investments you need to make right away. Right health insurance plans not only enable you to save tax under Section 80D of the Income Tax Act, but also provide you financial protection at time of hospitalisation. Section 80D allows you a deduction of up to Rs 25,000 for premiums paid and Rs 50,000 to people above the age of 60 years.
5. Don’t just limit yourself to Section 80C and 80D:
Your investments should not be limited to only the aforementioned sections. There are multiple lesser-known investment options that allow you to save on income tax. Under Section 80TTA, tax deduction benefit of up to Rs 10,000 is allowed on interests on your savings bank account.
Under Section 80TTB, tax deduction benefit of up to Rs 50,000 is allowed on interests on your savings bank /FD / RD account. Additionally, you may claim tax deduction benefits on expenses on medical treatment, donations made to NGOs or political parties, as well, under Section 80G, 80GGA, and 80GGC.
(Source: Taxguru) more
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Now even the interest rates are falling.Thus net income of Senior Citizen is reducing,whereas Inflation is continuing.Central Govt must look in to it. more
May 31
IS 15 H is admissible or not for scss We get difference of opnion Please clarify in detail. more
May 25
Please note that Form 15H is prescribed under Income Tax Act to avoid TDS if your total income from all sources is less than income chargeable to tax. It is a declaration given by you that your total income is below taxable limit. It is not related to source of income. As such if your total income from all sources including SCSS is less than taxable limit then you can submit Form 15H for no deduction of tax at source by Bank on interest income.
From Assessment year 20-21 if interest income is less than 50000 the bank will not deduct tax for Senior Citizens. more
From Assessment year 20-21 if interest income is less than 50000 the bank will not deduct tax for Senior Citizens. more
May 25
The biggest disadvantage for SCSS is that, even if your annual income is not taxable, yet the bank / post office will deduct tax while paying interest. There is no provision of 15H. Then you have to wait for long to file Annual Tax Return and seek refund. So net proceeds / related harassment are not encouraging. Better to avoid. more
May 25
You can submit Form 15H to avoid TDS. I have been submitting Form 15 H for SCSS account. more
May 25
