The financial year 2018-19 has arrived. It is time to pay tax.
How do you save tax?
Worry not! We have a few methods to save tax.
Tax Saving Methods for Salaried Professionals:
Invest in Public Provident Fund (PPF) :
One of the most popular and foremost investment options in India is Public Provident Fund (PPF). This is because of the tax benefits it offers, its features, and risk-free returns. Any citizen of India can open a PPF except NRIs.
NRIs cannot extend their existing PPF also. But they can continue to make deposits to the existing account which was opened before they became NRIs. A PPF can be opened in the name of a minor under the guardianship of any of the parents. [Get Personalised Advice For Public Provident Fund (PPF) – Visit]
Voluntary Provident Fund or Employee Provident Fund (EPF) :
A mandatory retirement planning fund where 12% of your basic pay is invested by your employer is called Employee Provident Fund (EPF). This is invested for the times you won’t get a regular income, usually during retirement.
It is an obligatory contribution from your salary. A company with more than 20 people has to deduct EPF. When you shift from one company to another, your EPF gets shifted to the new company. EPF permits you to accumulate money with interest and can be claimed upon retirement, resignation, and demise. This will help save tax. [Get Personalised Advice For Retirement Planning – Visit]
Invest in National Pension Scheme (NPS) :
A voluntary defined contribution pension system in India, National Pension Scheme (NPS) allows you to invest for retirement. This is tax exempt. In its overall structure, NPS is closer to 401(k) plans of the United States. Resident Indians and non-resident Indians can apply for National Pension Scheme under some conditions like age (between 18 and 60 years old). Every month, you invest money just like you do in PPF and EPF. This will ensure you have some money during your non-working years. [Get Personalised Advice For Public Provident Fund (PPF) – Visit]
Invest in National Savings Certificate (NSC) :
Under section 80 C, National Saving Certificate (NSC) is a popular tax saving investment. This has a maturity of five years band is guaranteed by the Government of India. NPS is a small savings and income tax saving investment and a post office savings product and extends many benefits. If you want a safe investment avenue to save tax while earning, you can invest here. For investing here, you have to be an Indian resident. There is fixed income along with saving of tax. [Get Personalised Advice For National Saving Certificate (NSC) – Visit]
Invest in Equity Linked Savings Scheme (ELSS) :
Under section 80 C, Equity Linked Saving Scheme (ELSS) to is one of the best investment options to save tax. They are a close-ended lock-in period of 3 years diversified equity schemes. They provide high returns and are tax-free.
Since they are equity diversified Mutual Funds, they invest in equity-linked instruments (like shares and stocks) to give market-linked returns. You can invest here and save tax. [Get Personalised Advice For Equity Linked Saving Scheme (ELSS) – Visit]
Take Medical insurance for Self and Parents (Section 80D) :
If you pay a premium for health insurance for yourself, parents, spouse, and children, you qualify for tax deduction under section 80 D. If either of your parents is senior citizens, there is an additional deduction of Rs.25000 regardless of whether they’re dependant on you not. But this benefit isn’t for in-laws. Joint families can avail this by insuring the health of one of their members. [Get Personalised Advice For Medical/Health Insurance – Visit]
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