Indian residents are bound to pay tax on their income (if it is beyond the minimum taxable limit as per the tax slabs) to the Indian government. There are stances where you could feel that you are paying excessive taxes. In such a situation you can make efforts to save your tax. The Income Tax Act, 1961 is complicated. If you are planning to save tax then it is a tough job and the following points can come in handy.
Public Provident Fund (PPF)
Investment in PPF is subjected to EEE tax exemption status. The scheme is from the government to help in savings and comes with a maturity of 15 years. It is simple to invest in it visit a bank or post office in India and enquire about it.
Employee’s Provident Fund (EPF)
EPF is designed for salaried individuals. If you make contributions towards your EPF account. The maturity amount and the interest income on EPF are also exempted from the Income Tax if you have completed 5 years of service.
Five-year-tax-saver Fixed Deposits
Investing in five-year tax-saver FDs can help in saving tax. One can claim a tax deduction in the Financial year up to Rs 1.5 lakh.
National Saving Certificates (NSC)
NSC s have a lock-in period of 5 years and they have a fixed rate of interest. Presently, the rate of interest is 8%. It helps in tax saving in two ways firstly the investments and the interest on investments both are tax-free.
Senior Citizen Saving Schemes (SCSS)
Make contributions towards SCSS and you are eligible for tax reduction. SCSS has a 5-year tenure and is available for investors above the age of 60 years. The rate of return is 8.7% per annum and it is quite higher than the bank FD rate.
Apart from the above-listed schemes, there are Life Insurance Policies, interests on home loans, National Pension Schemes, Medical Insurance Premiums, House Rent Allowance, a home loan for constructing a house property, disabled dependent deductions, and more that help in tax saving. The tips can help in planning your taxes in a much better way.