You may be looking for ways to reduce your taxes if you are employed. So, this news is beneficial to you. Let us inform you that before the end of the financial year, salaried individuals whose pay is subject to tax should plan their investments. By investing in a tax-saving plan before March 31, you can deduct it from your ITR.
There are other schemes available that allow you to invest and reduce your tax liability. Here, we'll go over some tax-saving strategies you may use to save money now and in the future while still benefiting from tax exemptions.
Equity Linked Savings Scheme, i.e. (ELSS)
Only one mutual fund program, the Equity Linked Savings Scheme, or ELSS Fund, offers investment tax benefits. Section 80C of the Income Tax grants you a tax exemption of Rs. 1.5 lakh in this case. You can make a 100 Rupee SIP investment in this. You are getting a 10–12% return on average in this.
Public Provident Fund (PPF)
PPF is one of the most widely used plans available today for long-term tax exemption. This plan offers tax advantages in accordance with Section 80C of the Income Tax Act. A total of Rs 1.5 lakh can be put into this plan each year, spread across numerous installments.
National Pension Scheme (NPS)
The government tax-saving scheme is called NPS. Section 80CCD permits a maximum tax deduction of Rs 2 lakh for this investment strategy. This includes a 1.5 lakh rupee tax exemption under section CCD(1) and an additional 50,000 rupee exemption under section CCD (1B).
Provident Fund (PF)
Another tax-saving plan is Provident Fund, which is suitable for people who wish to prepare for life after retirement. Employees who make EPF contributions are eligible for a tax exemption under Section 80C.
Insurance Policy
Investors who invest in health insurance plans qualify for an exemption under Section 80D. You receive an extra exemption of Rs 25,000 in addition to Rs 1.5 lakh under section 80C.
Home Loan
If you are still paying off your home loan, Section 80C of the Income Tax allows you to deduct up to Rs 1.5 lakh from your taxable income. In addition to this, section 24B allows for an extra tax exemption on housing loan interest payments of up to two lakh rupees.