One month left for filling the income tax return and hence you must have started planning for the tax investments in advance. If you are one of those communities who have not planned to save tax, it is important to channelize your monthly income in the right direction.
The Income Tax Act has enacted some tools for the exemption of different tools available. Here are the following tools available:
#1.Fixed Deposits under Section 80 C:
Fixed Deposits are the most simple and an investment source of generating high interest. Because of their low liquidity nature, they offer high rates of interest as comparing to the savings account.
For availing the Tax Benefit, a person can invest in the FD with maturity and lock-in the period of 5 years.
#2.Interest earned on Savings Bank Account under Section 80 TTA:
It is important to maintain liquidity and hence the interest earned on the savings bank account can also be exempted from income tax up to Rs 10,000 in a very financial year.
#3.National pension Scheme under Section 80CCD:
If you are getting a salary, your employers can contribute about 10 % of the basic salary in the NPS (National Pension Scheme) account. Under Section 80 C, the amount given will not be taxable and will not be calculated under rebate limit of Rs 1 lakhs.
#4.Life Insurance under Section 80 C:
Life Insurance is the safest option as it protects future of our family and also acts as an investment tool. After analyzing the insurance needs, you can opt for a suitable policy. The premiums paid by you and the maturity value of the insurance policy and the sum assured will be exempted from tax planning.
#5.Medical Insurance: Tax Rebate U/S 80D:
Medical Insurance is a plan, that protects you and your family against a financial emergency arising due to the unexpected medical emergency. When a person has claimed this insurance, one can easily pay for the expenses occurring due to a medical emergency.
Tax Deduction of Rs 20,000 for senior citizens and Rs 15,000 is available for the spouse, dependent children.
#6.Public Provident Fund Under Section 80 C:
It is an affordable investment option that offers the benefit of having the tax exemption. To open a PPF account, you will have to pay the Rs 500. The minimum tenure is 15 years that can be extended to 5 years in certain blocks. Interest exempted through the interest earned on PPF is exempted from tax.