Best Investment Instruments For Saving Income Tax In India

If you want to save income tax in india, you can take advantage of the section 80 C and 80D income tax law

. All the Best insurance plan are eligible for tax savings as per section 80D. In addition, if you purchase health insurance for your family as well as for your parents, you would be saving up to Rs. 35,000. there are many other options you can choose for income tax saving.

There are mutual funds designed for tax savings that come with a lock-in period of minimum 3 years. such mutual funds would notpay back the money within 3 years from the start of the fund. Such a mutual fund comes with high levels of returns. Another instrument that can help you save tax and make good investment in india in the form of Fixed Deposits or FDs. Bank fixed deposits are tax-saving for a specific period of time, usually 5 years. A bank FD would give you cumulative interest with a high level of safety.

Choosing the Best insurance plan from Life Insurance Corporation of India can also be a good tax saving step. In addition, you would be securing your and your familys life against any type of danger. LIC offers many different plans and you can choose the one that suits best to you. Public Provident Fund or PPF are similar to the Provident Funds in the case of salaried individuals. It is also a tax saving instrument.

PPF scheme has a 15-year tenure and the amount can be withdrawn within this period only once after 5 years. It is possible to open a PPF account with a post office or with any branch of State Bank of India. It would be required to make at least a single deposit in a year to maintain the account. National Saving Certificate bond is the next tax saving investment in indiato help you save tax. Also known as NSC bonds, they are available with post offices. This instrument would give you safe returns after a fixed period of time.

Equity Linked Savings Schememake another tax-saving investment options. Also known as ELSS, these are basically mutual fund-based schemes and carry a certain amount of market risk. However, the returns and highly rewarding and the investor can save tax. ELSSs come with obligatory lock-in period of 3 years. because they are long-term equity assets, thereforethe returns you receive are tax-free. Even with a lock-in period of 3 years, it would be better if you continue to invest for a longer period because equities can generate the highest returns in the long term.

These are the most widely used investment options nowadays for saving tax. If you are open to risks, then you should give more emphasis to mutual funds. However, if you want to expose yourself to moderate level of risk, invest 60% in mutual funds, 20% in fixed deposits and 20% in PPF. However, if you dont want to take an risk, then you should be investing solely in fixed deposits, PPFs or NSCs. Whichever option you choose from these instruments, they would all provide you income tax saving.

by: messy pen

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