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Top 5 Best Tax-Saving Investment Ways

People often get confused in choosing the right tax saving instruments in their life. Investing in a right tax saving options can help you get a good growth in your money. To make your life peace and save from tax burden, here is a list of top five ways of tax savings that make you plan a good financial status.

Public Provident Fund (PPF)

Public Provident Fund is the topmost tax saving option in the list. It is a popular long-term investment option made by Government of India, which offers safety, attractive interest rate and good returns that are fully exempted from tax. Opening an account and depositing to PPF will be tax deductible for taxpayers in India under the section 80C of Income Tax Act, 1961.

Equity Linked Savings Scheme (ELSS)

ELSS is a more risky investment option than PPF as ELSS needs investor prudence before making an investment. It is an effective tax management option which offers good returns and tax-free status for a lock-in period of 3 years.

Senior Citizen Saving Scheme

It is applicable for the people who have touched 60 years. It is a medium term savings option offering 9% annual interest on your deposits. Senior citizens can open multiple saving scheme accounts being the total investing amount not exceeding 15 lakh. The interest gained under this scheme is taxable.

Voluntary PF

It is an extension of Employee’s provident fund. You can save for retirement years from your current pre-tax income. You cannot stop contributions in the middle of the year and no way to draw cash until they retire.

New Pension Scheme (NPS)

It is applicable for the people aged between 18 and 55 years for retirement planning. Tax deductions are allowed only for contributions for an annual investment of Rs. 6,000.

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