Tax Saving Investment: Only one and a half months are left for the end of this financial year. If you have not yet invested enough for tax-savings, you have time till March 31 to do so. You will be able to claim tax deduction for the financial year 2023-24 only on investments made till March 31.
Have you made sufficient Tax Savings Investment for the financial year 2023-24 ? If not then you should complete this work soon. This financial year will end on March 31. You will have to make tax savings investment for this financial year by 31st March. It would be good to take a look at your tax savings investments once. Under Section 80C of the Income Tax Act, 1961, a maximum investment of Rs 1.5 lakh can be made in a financial year. If you have not yet taken full advantage of this limit, you will have to invest the remaining amount soon. We are telling you about some popular tax-saving investments. The government has recently increased the interest rate of this scheme to 8.2 percent for the January-March quarter.
1. Mutual Funds Tax Scheme (ELSS)
About a dozen investment instruments come under Section 80C. The most popular among these is the tax-savings scheme of mutual funds. It is also called Equity Linked Savings Scheme (ELSS). This can be invested in lump sum or through SIP every month. For FY24, now you are left with only lump sum investment opportunity. The lock-in period in tax savings scheme is 3 years. This means that you will be able to withdraw your money only after three years of investing. All tax-saving investments have a lock-in period. ELSS provide very good returns in the long run.
2. Public Provident Fund (PPF)
This is the most popular small savings scheme of the government. Since it is a government scheme, investment in it is completely safe. PPF facility is available in many government and private banks. This scheme matures in 15 years. This means that if you start investing in PPF, you will get your money back with interest only after 15 years. However, partial withdrawal is allowed from the sixth year onwards. PPF is a good investment for long term investment.
3. Sukanya Samriddhi Yojana (SSY)
This savings scheme of the government is for girls. Parents can open Sukanya Samriddhi account in the name of their daughter. This account can be opened before the daughter is above 10 years of age. It can be opened with a deposit of just Rs 250. A maximum of Rs 1.50 lakh can be deposited in this scheme in a financial year.
4. Tax Savings Fixed Deposit
Bank’s tax saving fixed deposit is the easiest investment. This scheme is available in most banks. However, its lock-in period is five years, which is higher than the tax saving schemes of mutual funds. The interest on this is the same as a normal FD. Currently, the interest rate on tax savings fixed deposits of government and private banks is between 6.5 to 7.25 percent.
5. National Savings Certificate (NSC)
This is a fixed income post office savings scheme. Since it is a government scheme, investment in it is completely safe. Investment in this scheme can be made in the post office. The minimum investment amount in this is Rs 1,000. There is no maximum limit for investment in this scheme. Currently the interest rate of this scheme is 7.7 percent. Its lock-in period is 5 years.
