Under the National Pension System, in addition to Rs 46,800 under Section 80C, 80CCD (1B), an additional Rs 15,600 can be saved every year. Under Health Insurance-Family Floater Plan, one can save up to Rs 23,400 per year under Section 80D.
It is more important to save than to earn. And saving will be possible only when we know some ways of saving. Here the way of saving does not mean depositing money in the piggy bank. Saving also means tax saving. That is, if you save the tax on your earnings, then that too is a heavy task. There are many tax-saving products in the market that we should be aware of.
Here we will talk about 10 major tax saving products or schemes, which give us an opportunity to save thousands of rupees in a year. 5 Year Tax Saver FD, Mutual Fund-Equity Linked Saving Scheme, Term and Unit Linked Insurance Plans in Life Insurance, Public Provident Fund, National Savings Certificate, Home Loan Principal Repayment, Sukanya Samriddhi Yojana, National Pension System, Health Insurance-Family Floater, home loan interest on your property. These 10 products are such that with the help of which a lot of tax money can be saved.
How much tax can you save
5 Year Tax Saver FD, Mutual Fund-Equity Linked Saving Scheme, Term and Unit Linked Insurance Plans in Life Insurance, Public Provident Fund, National Savings Certificate, Home Loan Principal Repayment, Sukanya Samriddhi Yojana under Section 80C of Income Tax Under this, you can save Rs 46,800 every year. Under the National Pension System, in addition to Rs 46,800 under Section 80C, 80CCD (1B), an additional Rs 15,600 can be saved every year. Under Health Insurance-Family Floater Plan, one can save up to Rs 23,400 per year under Section 80D. If you own a property, you can save up to Rs 62,400 every year under section 24B on home loan interest.
On what basis is the tax calculated?
The tax saving of Rs 46,800 is calculated on an investment of Rs 1,50,000 as per the highest tax slab of 31.2% under section 80CCD (1B) of Income Tax. Similarly, under Section 80C of the Income Tax Act, 1961, the highest rate of tax at 31.2% is calculated to save Rs 15,600 on an investment of Rs 50,000. The tax saving of Rs 62,400 is calculated on payment of interest of Rs 2,00,000 with the highest tax slab 31.2% under section 24(b) of Income Tax.
Know about lock in period and returns
- 5 years bank fixed deposit gives a return of 6-7 percent. It has a lock-in period of 5 years and is taxable on returns.
- Public Provident Fund or PPF gives returns of 7-8 per cent and has a lock-in period of 15 years. There is no tax on the return received in this
- National Savings Certificate gives an annual return of 7-8 per cent and has a lock-in period of 5 years. Tax is levied on the return received in this
- The National Pension System or NPS gives an annual return of 8-10 per cent and has a lock-in period till retirement. Its returns are partially taxed
- Equity Linked Savings Scheme or ELSS offers returns of 15-18 per cent and has a lock-in period of 3 years. Its returns are also partially taxed
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