How to save taxes without making additional investments under Sec 80C?

Making tax savings investments is a ritual that every taxpayer has to go through before the end of every financial year. There are many tax-saving schemes and options available for taxpayers in the Income Tax Act which helps them save a chunk of tax as well as make significant investments in the process. 

The most common and widely used tax-saving provision available in the Act is Section 80C. There are many options that the taxpayers can invest in under section 80C and claim the benefit of a deduction up to Rs. 1,50,000 from their gross total income. Some of the options available under section 80C are an investment in PPF, LIC, tax saving mutual funds, fixed deposits, Sukanya Samriddhi Yojana, NPS, repayment of home loans, etc.

Other tax saving options

Apart from Section 80C, the Act provides many more tax-saving options for the taxpayers to reduce their tax liabilities. Some of such tax saving options that you could consider for saving taxes before investing additional money under Sec 80C are (more…)

Tax saving options for the Self-Employed

India has more number of self-employed people as compared to salaried individuals. Our country is called a large gig economy considering the population size of self-employed people who have made it so. Self-employment encompasses workers from varied categories like casual labourers to freelance professionals, graphic designers, writers,etc. Most self-employed individuals have irregular payment systems and therefore require tax-saving options to sync with their erratic payment schedule.

Here, we will discuss various aspects of tax saving for self-employed individuals in India. (more…)

Taxes on Mutual fund investments- How do they work?

The current generation has grown up listening about mutual funds. The most common thing anyone knows about then is that they are subject to market risks. Mutual funds are an easy and effective way of investment for all age groups. But when it comes to taxes on mutual funds not many are aware of how they are taxed and that’s when the investor has to bear the tax brunt. 

We bring you all the details that you need to know about how your mutual fund investments are taxed. We advise you to bookmark 🔖this page for your reference. 

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Tax saving for senior citizens

Tax saving options suitable for senior citizens

India is a relatively young country but has a significant senior citizen population. Any person over the age of 60 years is termed as a senior citizen in India. The Government of India provides many incentives for the benefit of the senior citizens of the country in terms of health care, tax benefits, etc. There are many schemes that are centered to provide not only a retirement fund at the time of old age but also provide tax benefits to the senior citizens. 

Given below are a few popular choices for tax-saving schemes that can be used by senior citizens to not only build a corpus fund but also save some taxes along the way. (more…)

Tax saving

Best tax saving options for 2020-21

India has two types of tax structure – direct taxes and indirect taxes. While indirect taxes are collected through various products and services, direct taxes are charged on the taxable income of the eligible taxpayers. Taxes are essential for the progress of any state but tax-payers have the option of investing in tax-saving schemes to reduce their tax outgo. These tax savings provide a dual benefit i.e. tax-saving and building an investment portfolio.

As we approach the fag end of this Financial year (2020-21), we bring to you 10 tax savings schemes that you could consider if you haven’t done your investments yet. 

Best tax saving options for FY 2020-21

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Save Tax and Grow Wealth with ELSS

Those who pay the taxes will be familiar with this product called Equity-Linked saving schemes. If you are the person who is looking to save and invest to save the tax, ELSS could turn out to the best rewarding investment option. The ELSS funds have been superior to the other tax saving investment options.

If you invest in certain products like a life insurance policy, Public Provident Funds, or units of an ELSS scheme, you can get a tax deduction on your taxable income. Thus, ELSS is a type of Mutual Fund which has a lock-in period of 3 years along with the tax exemption under section 80C of the Income Tax Act.

How is ELSS better than other tax-saving instruments?

Here is a comparison of ELSS with other tax-saving investment options.

  • Lock-in period: ELSS has a minimum lock-in period of 3 years when compared with the other tax-saving instruments.
Instruments Lock-in period
ELSS 3 years
FD 5 years
NSC 5 years
PPF 15 years
NPS Till retirement

 

  • Returns: ELSS have the potential to generate good returns when compared with other instruments.
Instruments Returns earned
ELSS 15-18%
FD 6-8%
NSC 7-10%
PPF 8-10%
NPS 9-11%

 

  • Taxation: Like all other tax saving instruments, the amount invested in ELSS is tax-deductible under section 80C of the Income Tax Act and allows a maximum deduction of Rs 1,50,000. Unlike other tax-saving instruments, the returns generated through investment in ELSS and NPS are partially taxable and are not fully taxable. Capital gains on ELSS up to 1 lakh is exempted from tax.
  • SIP option: In a few tax-saving instruments like FD and NSC, only a lump sum amount is acceptable. Whereas you can invest in ELSS through SIP(Systematic Investment Plan) which allows you to deposit a small amount at regular intervals (weekly, monthly, quarterly, yearly) which can be as low as Rs 500.
  • Risk: ELSS will involve a higher amount of risk when compared with the other instruments because they are Equities are subjected to market fluctuations.
Now that you know ELSS is better than other tax saving instruments and start investing through Finity.