Confused about choosing the right investment plans in India? If yes, then there are several choices that can be considered these days. However, the biggest principle behind investing is not only to earn returns but also to ensure proper tax efficiency as well. So, on that note, here are the investment choices worth noting.
Tax-Saver Investments- What You Should Know
Here are some of the top investment plans in India to help you save taxes in the long run.
- Pension and life insurance plans- Life coverage is readily available under life insurance policies with deductions up to Rs. 1.5 lakh as per Section 80C. Premiums payable under the policy will help get you deductions accordingly. Simultaneously, sum assured or death benefit payouts will also be tax-exempted as per Section 10 (10D). Pension plans will also help you get similar deductions under Section 80CCC (including Section 80C deductions). Upon the vesting date, around 1/3rd of the amount will have exemptions, while taxes will apply on 2/3rds of the figure that is required for buying the annuity.
- Equity-linked savings schemes- ELSS is another option for saving on taxes while gaining attractive long-term returns. There are three-year lock-in periods for these policies. At the same time, tax deductions under Section 80C are also available on your contributions (which can be done through SIPs or systematic investment plans).
- National Pension Scheme- The NPS offers similar tax deductions under Section 80C (up to Rs. 1.5 lakh). It is one of the most popular choices for retirement planning. Lock-in periods, as per the plan, are till the individual turns 60 years of age. The amount will be 60% exempted from taxes on the date of vesting. The remaining 40% will be used to buy the annuity plan and will be subject to taxes.
- Public Provident Fund (PPF) – This is another tax-saving investment that will enable up to Rs. 1.5 lakh in deductions under the Income Tax Act’s Section 80C. The amount received at the time of maturity will be exempted along with the earnings from interest.
- Health Insurance- Getting health coverage will also be a strategic way to enjoy tax benefits while ensuring financial protection for sudden medical emergencies, treatments, hospitalization, etc. Deductions are available (up to Rs. 25-50,000) as per Section 80D, based on the taxpayer category that you are under.
To conclude, it can be said that there are several tax-saving investment plans in India that you may take into account for a better and more prosperous future. These are considerably easier investment choices, and you can save handsome taxes by staying invested in them. You can also take a look at other options in similar categories, like ULIPs (unit-linked insurance plans), which also give you tax deductions under Section 80C, subject to certain conditions. They offer a mix of life coverage and investment returns that may serve your investment purposes better. You should compare all options carefully and take professional guidance before investing.
Santosh Kumar is a Professional SEO and Blogger, With the help of this blog he is trying to share top 10 lists, facts, entertainment news from India and all around the world.