Who doesn't enjoy a good salary? After all, that is the one thing that everyone seeks. But as much as we enjoy a good salary, we hate the taxes that come with it. However, good planning on taxes can help you save money, lowering your taxable income.
Section 80C of the Income Tax Act gives provisions for a number of deductions on certain investments. The limit for such deductions is Rs 1,00,000. The individual can opt for a refund and claim reductions in their taxable income if they have invested in LIC, PPF, Mediclaim, among others.
Here are some tax-saving schemes under Section 80C (Source: Policy Bazaar):
Public Provident Fund (PPF)
One of the safest long-term investment options, the 15-year investment scheme gives interest at 8.8 percent. An individual is required to submit at least an amount of Rs 500 and a maximum of Rs 1 lakh a year under the plan. The interest rate for PPF keeps changing and the salaried employees are exempted from paying tax under the scheme.
Pension Funds
Individuals who have opted for a pension plan can claim tax refunds on a maximum amount of Rs 1 lakh.
Senior Citizen Savings Scheme
Individuals above the age of 60 can opt for this scheme. The scheme offers an interest rate of 8.7 percent per annum with effect from October 1, 2018. The scheme has a maturity amount of 5 years with an extension period of three years. The interest amount is taxable once it reaches Rs 10,000.
Life Insurance
If an individual has opted for life insurance, he or she can apply for a tax refund on the same. The premium paid on life insurance is deductible from the taxable income.
Fixed Deposits
Five-year fixed deposits come under non-taxable income. For this, the individual is required to approach the bank and opt for the FD option with a tenure of five years and ask the banker to put a stamp or seal the FD with the tax saver FD tag.
Post Office Time Deposit Scheme
The scheme is similar to that of FD's under which for a period of up to five years, the individual does not have to pay tax on the investment. The current interest for such deposits is 7.3 percent.
National Saving Certificate (NSC)
The five to 10-year saving scheme, under which the interest rate changes every quarter, is also deductible from taxable income. The interest rate for the December quarter stood at 8 percent. The revised rate is yet to be out.
