It is very important to understand the ways of saving tax in the new financial year. Here we have told which schemes you can invest in to save tax and how much you can save in them.
Tax Planning: The new financial year 2022-23 has started. In such a situation, it is very important for you to understand the methods of tax saving, so that your hard earned money does not just go into tax. Keeping in mind the changes in tax rules in the new year and the possibilities of growth in your income, you should do tax calculations afresh. You should calculate your estimated annual income and also consider all the available tax saving methods to save tax.
Vikas Singhania, CEO, TradeSmart said, “Once our income becomes taxable, tax planning becomes very important. By having a thorough knowledge of the tax planning structure, we can save ourselves from paying unnecessary taxes and invest in right places to save more. In this way we can achieve our goals as well.”
Tax saving investments are generally long term investments and come with a lock-in period. Therefore, you should invest wisely, so that apart from saving tax, you can also achieve your long term goals through this. Let us know which options you can choose according to your need to save tax.
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PPF and FD
Public Provident Fund (PPF) and tax saving FDs can avail tax deduction of up to Rs 1.50 lakh on the amount invested during the financial year.
NPS
National Pension System (NPS) is a retirement planning scheme to generate monthly income during the retirement period. Both government and private sector employees can take advantage of this.
SCSS
The Senior Citizen Saving Scheme (SCSS) is designed to provide regular income to people above the age of 60 years, with a tax benefit of up to Rs 1.50 lakh.
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life insurance
Life insurance offers tax benefits up to Rs 1.50 lakh, while ULIP provides market-linked returns with insurance and tax deduction.
health insurance
Health insurance can save you tax up to Rs 25,000 on regular premiums paid for yourself, spouse and children. Whereas it can be increased to Rs 50,000 if both the parents are also covered.
ELSS
Equity Linked Savings Scheme (ELSS) is another good option where you can save tax. It allows you to invest in the stock market and save tax along with a minimum lock-in period of 3 years.
other options
There are other investment options as well where you can save tax. You can also save tax by investing in NSC (minimum deposit Rs 100, investment tenure 5 years), Sukanya Samriddhi Yojana (to secure the financial future of the girl child), and home loans.
(Article: Amitava Chakrabarty)
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