Apply for - Various Tax Saving Plans
There are many schemes that are available for deductions under the Income Tax Act. The tax that an individual is liable to pay is given in the Income Tax Slab of the Union Budget at the end of the financial year. Some of these are:
Equity linked savings scheme(ELSS):
Equity Linked Saving Schemes are investments in mutual funds of equities or debt. These are eligible for deductions under section 80C as listed in the Income Tax Act of 1961. ELSS investments in which the mutual funds by the individual in equity funds such as diversified equity funds which have tax benefits. It is similar to the other Tax Saving Schemes, such as Public Provident Fund, Life Insurance, RGESS and so on. The main features of these mutual funds are the three year lock-in period of these funds, as compared to the PPF which has a lock-in duration of 15 years or NSC of 6 years. However, they come with a disadvantage of being highly risk prone.
Advantages of Equity linked savings scheme (ELSS):
1. Provide 30 to 40% returns as compared to the 8% in NSC and PPF schemes.
2. Short lock-in period of three years. Maturity periods of the NSC scheme is 6 years and PPF account is 15 years.
3. An investor can also ask for a dividend option and obtain gains due to these during the lock-in period.
4. Some of the ELSS funds also provide insurance against death due to accident.
5. Investor can opt for Systematic Investment Plan.
6. Earning potential is very high as they are long term.
7. Tax benefits as Deductions Under Section 80C.
Disadvantages of ELSS:
1. The schemes are high risk prone so not suitable for the risk averse category investor.
2. The premature withdrawal of the funds is not allowed in some and is present in some of the scheme.
Health Insurance is insurance availed by an individual to ensure the health of their themselves and their family in cases of critical medical illness. A health insurance is important in today’s time, because of the increasing costs of healthcare and also to protect one’s loved ones in times of trouble. Any person who wishes to avail tax benefits with the help of a health insurance can obtain those Under Section 80D of the IT Act. A person can avail these benefits up to a limit of Rs. 15,000 or more.
Advantages of Health Insurance:
1. It saves time and money of the individual as the person can get oneself checked and return to work on time.
2. It ensures that there is no lack of money at the time of medical illness.
3. Tax benefits can be availed with their help.
Disadvantages of Health Insurance:
1. The premium amounts are high.
2. High premiums do not ensure that the amount of coverage provided will also be high
3. Lack of choice of own doctor.
4. Complicated rules in the policy.
These are bonds that are invested by a person in development of infrastructure and real estate. These bonds are eligible for Deductions Under Section 80CCF of the IT Act. These have been however, now are no more eligible for tax deductions. There are many other investments that are available for tax saving.
|Have you verified your Income Tax Return?||Yes Bank warned by RBI on ‘Zero divergence’ disclosure||Different Types of Forms for Filing Income Tax Returns|
|Verify Your Income Tax Return If you’re only going to fill your income tax return then let us clear that filing procedure isn’t enough unless you haven’t verified it. Only verified income tax ret...||Says Yes Bank mislead public by releasing parts of ‘confidential report’; contemplating action. The Reserve Bank of India (RBI) has forewarned to take action against private sector lender Yes Bank for ...||Income Tax Returns are an important aspect for carrying out the financial Tax filing activities. The process is of huge significance for a salaried or a self-employed person. It is very crucial to file the income tax ...|