REMEMBER TO SAVE ON TAXES BEFORE MARCH ENDS
There are several tax saving options available to investors
March is usually the month when a large number of people rush to make some investments which will allow them to save on their total tax liability for the financial year. Although ideally this should be done from the start of the financial year, but still people prefer the last moment rush. There are a host of financial investment options to save taxes under section 80C of the income tax act. Listed below are a few:
Offered by mutual fund houses, equity linked savings schemes (ELSS) are one of the most popular tax saving options. These funds come with a three-year lock-in, invest at least 65% in stocks and have given stellar returns in the past. Financial planners and advisors say these are one of the best tax saving options available.
Although a limited number of mutual funds offer pension or retirement plans, but these plans are ideal for risk-averse investors looking to build retirement corpus over the long run. Thesefunds mostly invest in debt instruments.
National pension scheme (NPS) offers investors the option to invest an additional Rs 50,000 per annum which is over and above the Rs 1.5 lakh tax saving investment limit under section 80C.
There are several other tax saving options as well which include life and health insurance, PPF, approved fixed deposits, National Savings Certificates, senior citizen savings scheme, Sukanya Samridhi Yojana etc.
ONE CAVEAT: Tax savings should not be the first or the only criteria for selecting the investment. One should look at returns and suitability.