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Investment Options To Help
You Save Taxes Under
Income Tax Act
Recommended ways of saving taxes under
Section 80C of the Income Tax Act
• Are you Salaried or Self-employed? Are you finding legitimate ways of
saving taxes?
• The interest amount from tax-saving financial products like the
National Saving Scheme (NSC), National Pension System, Fixed bank
and post office deposits of 5 years etc. gets added to your income and
becomes entirely taxable.
• The Interest Income from the above investments is liable for tax each
year until their maturity.
• Before you make any investment for tax saving and good returns, it is
important to know about the key section of the Income Tax Act, and
which investment option helps you save tax.
Investment Options under Section 80C to get
relief from Tax
Investments Returns Lock-in Period
Fixed Deposit (FD) 6% to 7% 5 years
Public Provident Fund (PPF) 7% to 8% 15 years
National Savings Certificate (NSC) 7% to 8% 5 years
National Pension System (NPS) 12% to 14% Till Retirement
Equity Linked Savings Scheme (ELSS) Funds 15% to 18% 3 years
Sukanya Samriddhi Yojana (SSY) 8.5% NA
Unit Linked Insurance Plan (ULIP) Vary by plan 5 years
Insurance Vary by plan 3 years
Senior Citizen Saving Scheme (SCSS) 8.7% 5 years
11 Investment Options To
Help You Save Taxes
1. Tax Saver Fixed Deposits (FD)
• Duration: 5 year.
• Tax Deduction: Up to ₹ 1,50,000.
• Rate of Interest: 6% to 7% (Fixed).
• Interest Amount taxable: Yes.
2. Equity Linked Savings Scheme (ELSS) Funds
• These are mutual funds investing a minimum of 80% of their assets in
equity.
• Duration: 3 years.
• The returns are subject to Long Term Capital Gains Tax (LTCG) at 10%
over and above an exemption limit of ₹ 1,00,000.
• Save Tax: Up to ₹ 1,50,000.
3. Public Provident Fund (PPF)
• Duration: 15 years.
• Rate of Interest: 8% p.a. at current (subject to change on a timely
basis).
• Tax Exemption: Up to ₹ 1,50,000.
4. National Saving Certificate (NSC)
• Duration: 5 years.
• Rate of Interest: Currently at fixed rate of 8% p.a.
• Tax Deduction: Up to ₹ 1,50,000 (if no other investments are using
the limit under Section 80C).
5. National Pension System (NPS)
• Duration: From the day of investment to the day of retirement.
• Rate of Interest: 12% to 14%.
• Tax Deduction: Up to ₹ 1,50,000.
6. Life Insurance Premium
• Contribution to different types of insurance policies including ULIPs,
term insurance, and endowment policies.
• Tax Deduction: Up to ₹ 1,50,000.
• Insurance policy must provide a coverage of 10 times the annual
premium.
7. Home Loan Repayment
• Tax Deduction: Up to ₹ 1,50,000.
8. Payment of Tuition Fee
• Payment for tuition fees of your children is tax-deductible under
Section 80C of Income Tax Act.
• Tax Deduction: No Limit.
9. Employee Provident Fund (EPF)
• Under the EPF Act, 12% of the payment goes towards EPF in the
organized sector.
• Tax Deduction: Up to ₹ 1,50,000.
10. Senior Citizen Saving Scheme (SCSS)
• Duration: 5 years.
• Available for: Senior Citizens above 60 years.
• Rate of Interest: Higher than current FD rates and is taxable.
• Tax Deductible under Section 80CCD(1B).
11. Sukanya Samriddhi Yojana (SSY)
• Investor: Parents of a girl child below 10 years.
• Investment: A minimum deposit of ₹ 1,000.
• Rate of Interest: 8.5% return and comes with the Exempt-Exempt-
Exempt (EEE) status.
• Qualifies for tax deduction under Section 80C along with non-taxable
maturity benefits.
   Thank You !!!   

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Investment options to help you save taxes under income tax act

  • 1. Investment Options To Help You Save Taxes Under Income Tax Act
  • 2. Recommended ways of saving taxes under Section 80C of the Income Tax Act • Are you Salaried or Self-employed? Are you finding legitimate ways of saving taxes? • The interest amount from tax-saving financial products like the National Saving Scheme (NSC), National Pension System, Fixed bank and post office deposits of 5 years etc. gets added to your income and becomes entirely taxable. • The Interest Income from the above investments is liable for tax each year until their maturity. • Before you make any investment for tax saving and good returns, it is important to know about the key section of the Income Tax Act, and which investment option helps you save tax.
  • 3. Investment Options under Section 80C to get relief from Tax Investments Returns Lock-in Period Fixed Deposit (FD) 6% to 7% 5 years Public Provident Fund (PPF) 7% to 8% 15 years National Savings Certificate (NSC) 7% to 8% 5 years National Pension System (NPS) 12% to 14% Till Retirement Equity Linked Savings Scheme (ELSS) Funds 15% to 18% 3 years Sukanya Samriddhi Yojana (SSY) 8.5% NA Unit Linked Insurance Plan (ULIP) Vary by plan 5 years Insurance Vary by plan 3 years Senior Citizen Saving Scheme (SCSS) 8.7% 5 years
  • 4. 11 Investment Options To Help You Save Taxes
  • 5. 1. Tax Saver Fixed Deposits (FD) • Duration: 5 year. • Tax Deduction: Up to ₹ 1,50,000. • Rate of Interest: 6% to 7% (Fixed). • Interest Amount taxable: Yes.
  • 6. 2. Equity Linked Savings Scheme (ELSS) Funds • These are mutual funds investing a minimum of 80% of their assets in equity. • Duration: 3 years. • The returns are subject to Long Term Capital Gains Tax (LTCG) at 10% over and above an exemption limit of ₹ 1,00,000. • Save Tax: Up to ₹ 1,50,000.
  • 7. 3. Public Provident Fund (PPF) • Duration: 15 years. • Rate of Interest: 8% p.a. at current (subject to change on a timely basis). • Tax Exemption: Up to ₹ 1,50,000.
  • 8. 4. National Saving Certificate (NSC) • Duration: 5 years. • Rate of Interest: Currently at fixed rate of 8% p.a. • Tax Deduction: Up to ₹ 1,50,000 (if no other investments are using the limit under Section 80C).
  • 9. 5. National Pension System (NPS) • Duration: From the day of investment to the day of retirement. • Rate of Interest: 12% to 14%. • Tax Deduction: Up to ₹ 1,50,000.
  • 10. 6. Life Insurance Premium • Contribution to different types of insurance policies including ULIPs, term insurance, and endowment policies. • Tax Deduction: Up to ₹ 1,50,000. • Insurance policy must provide a coverage of 10 times the annual premium.
  • 11. 7. Home Loan Repayment • Tax Deduction: Up to ₹ 1,50,000.
  • 12. 8. Payment of Tuition Fee • Payment for tuition fees of your children is tax-deductible under Section 80C of Income Tax Act. • Tax Deduction: No Limit.
  • 13. 9. Employee Provident Fund (EPF) • Under the EPF Act, 12% of the payment goes towards EPF in the organized sector. • Tax Deduction: Up to ₹ 1,50,000.
  • 14. 10. Senior Citizen Saving Scheme (SCSS) • Duration: 5 years. • Available for: Senior Citizens above 60 years. • Rate of Interest: Higher than current FD rates and is taxable. • Tax Deductible under Section 80CCD(1B).
  • 15. 11. Sukanya Samriddhi Yojana (SSY) • Investor: Parents of a girl child below 10 years. • Investment: A minimum deposit of ₹ 1,000. • Rate of Interest: 8.5% return and comes with the Exempt-Exempt- Exempt (EEE) status. • Qualifies for tax deduction under Section 80C along with non-taxable maturity benefits.
  • 16.    Thank You !!!   