There are many taxing saving schemes and methods that many of us are not aware of. We are entitled to get savings on income tax as per the Act 1961. This is possible if we invest in certain tax exemption schemes to get deductions. We will see the possible ways on how to save taxes.
Tax saving schemes under Section 80C
Fixed Deposits (FD): You can claim deductions of upto Rs 1.5 lakhs in a financial year on the interest earned in the FD’s with a lock in period upto 5 years.
PPF: The interest earned on Public Provident Fund is also eligible for tax deductions.
ELSS: You can claim tax deductions of upto Rs 1 lakh on Equity Linked Savings Schemes which are locked in for 3 years.
National Pension System (NPS): This is completely a risk free scheme to save yourself from paying taxes. Individuals can claim NPS tax benefit of upto to Rs 1.5 lakhs. Apart from this under 80CCD(1B) an additional benefit on investment of upto Rs 50000 in available for Tier 1 accounts.
National Savings Certificate (NSC): Investment made upto Rs 1,50,000 in this savings bond scheme by Government of India will help in saving taxes under section 80c.
SCSS: Senior Citizens Savings Schemes as the name reads that citizens above 60 years will get tax exemption of upto Rs 150000.
Sukanya Samriddhi Yojana (SSY): This is a small saving scheme by the Government for girl child under 10 years. The maximum investment under this scheme is Rs 1.5 lacs which gets full exemption. The interest earned under this scheme is also tax free.
House Loans : You can get tax deduction under 80c for the payment of home loan principal amount. Under IT Act Section 24, you can also get deduction of upto Rs 2 lakhs on the interest payment taken for home loans.